Friday 24 October 2014

Green hopes to offload 25pc stake in Topshop and Topman for £250m

Tara Black

Published 06/12/2012 | 05:00

BILLIONAIRE Philip Green is close to selling a 25pc stake in Topshop and Topman to an American private equity firm in a move that will generate a multi-million-pound windfall for the retail tycoon.

The colourful entrepreneur is in advanced talks to sell the stake in the high street chains to Leonard Green & Partners for as much as £250m (€308m).

A source close to the deal, which is not finalised but is expected to be announced tomorrow, said it would give Green a powerful war chest to "buy, deal and expand around the world".

The retailer, estimated to be worth £3bn, is driving an ambitious international expansion programme in America and Asia.

The deal also offers Green an alternative way of taking money out of his empire than as a dividend from Arcadia, the holding company that owns both brands as well as Dorothy Perkins, Burton, BHS and Miss Selfridge.

In 2005, Arcadia attracted controversy by raising debt to pay a dividend to its legal owner, Lady Green, the tycoon's Monaco-based wife.

Under the terms of the deal – first reported by Sky News – Arcadia would ring-fence the remaining stakes in Topshop and Topman from its other fashion business, which include Dorothy Perkins, Burton, BHS and Miss Selfridge.

Arcadia, which employs 43,000 people, recently reported a rise in pre-tax and pre-exceptional profits from £133m last year to £167m in 2011.

It does not report a breakdown of the performance of its individual chains but analysts say Topshop is the most profitable part.

Arcadia has bank debt of £308.9m and net debt of £445m.

Group debt peaked after the controversial dividend payment but two years ago Green vowed that the group would be debt-free by this year. At the time he said the debt would be cleared by the rapid growth of the company.

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