VICTORIA THOMSON

COMET owner Kesa Electricals is considering putting its French furniture business up for sale after a number of firms signalled an interest in bidding for the company.

Shares in Kesa jumped 7.25 per cent as the group confirmed it was in “very early stage” evaluations after receiving a “number of indications of interest” to acquire the BUT chain.


But it added that there was no guarantee of a sale.

The confirmation came after French newspaper Les Echos reported that Kesa, which also owns the electricals retailer Darty in France, had appointed investment bank Lazard to examine buyout proposals from private equity groups.

The proposals are understood to value the BUT chain in the range of 500 million (£337m) and 800m.

Kesa owns 101 BUT stores across France, with another 100 sites operated under franchise.

BUT specialises in home furnishings as well as electricals. The group has seen sales slip over the last few years amid increased competition from retailers such as IKEA.

Nick Bubb, retail analyst at Pali International, said the sale of BUT made sense. “BUT has never sat easily within the group,” he said. “Performance has been poor in recent years… though new ranging and store design has resulted in some recovery recently and that may have got buyers interested again.

“We don’t think BUT is a quality business, but it does have £200m of freehold property.”

Evolution Securities analyst Freddie George added that if BUT was sold there would be a strong logic to break up the rest of the company. He said: “Apart from contributing 25 per cent of group sales, it adds little in the way of synergies to the business, needs more capital to buy out the franchisees and is a management distraction.”

BUT reported a 5.6 per cent rise in profits to £36.1m in the year to 31 January, as revenues grew 3.1 per cent to £595.7m out of £180.9m group retail profits, an increase of 9.7 per cent.