Wednesday 18 October 2017

Middle Eastern group leads suitors for Arnotts

SHANE ROSS

A Middle East-led consortium is believed to be the front runner in a queue of investors lining up to make a bid for retail store Arnotts, according to banking sources.

The deeply-indebted department store, that went on an ambitious but ill-fated property play in Dublin at the height of the boom, fell into the hands of Anglo Irish Bank and Ulster Bank. Both banks had made substantial non-performing loans to Arnotts.

The two banks are believed to have surprised observers by turning away serious interest from at least three parties, including the Middle Eastern group. Rival bidders for the store include London & Regional Properties, one of the largest property companies in Europe with substantial business interests in more than 10 countries including the UK, Germany, Russia, South Africa and Panama. London & Regional is a big player in the Distressed Asset sector.

The third suitor for Arnotts is understood to be the giant US investment house Citigroup, thought to have assembled a rival group of investors. Sources suggest that Citi has contacted Ulster Bank with an expression of interest while the other two approaches have been made to Anglo.

Anglo Irish Bank has shown little interest in selling Arnotts despite the bank's obvious insolvency and critical need for funds. Sources at Anglo insist that it will not be ready for a sale until major structural changes have taken place.

Last month Arnotts appointed American Mark Schwartz to succeed Richard Nesbitt as chairman. Mr Schwartz is chief executive officer of the Paladin Capital Group, a US private equity firm. His extensive interests in the retail sector sparked speculation that the Paladin Group might make a bid for Arnotts.

Sunday Independent

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