Carpetright to be taken over by Meditor

Carpetright to be taken over by Meditor
Meditor will buy Carpetright to help pay off retailer's debt
// Carpetright to be bought by Meditor
// Deal values Carpetright at £15.2 million

Carpetright has agreed to be taken over by Meditor, its largest shareholder, in order to repay its debt.

The deal values the carpet and DIY retailer at £15.2 million and will see shareholders receive 5 pence per share in cash, representing a premium of 18 per cent.

READ MORE: Carpetright considers sale to repay debt

The news comes after weeks of talks over a potential sale for the business.

Meditor has a 29.9 per cent stake in Carpetright. In October, reports circulated that the investor had offered to buy the retailer to avoid it collapsing due to debt.

Carpetright’s net debt was set to increase to between £40 million and £50 million in December, with Carpetright stating it needed £80 million to fund its turnaround strategy.

Meditor took control of Carpetright’s revolving credit facility of £40.7 million in late August, replacing previous lenders NatWest and AIB.

Last month Carpetright said it has been ”performing well despite the challenging economic backdrop and intense sector competition and group profitability is improving as the company drives store efficiency and reduces the central cost base”.

The retailer warned on “the ongoing impact of negative consumer confidence and Brexit on the current retail environment” which could present a challenge in the balance of the financial year.

With 330 stores in its portfolio, Carpetright has been struggling for years and fought off its collapse last year by entering a Company Voluntary Arrangement (CVA) restructuring that closed shops and reduced rents.

“The board believes that the offer (from Meditor) is the only viable route to deliver its requirements for a deliverable, controllable solution to the long-term funding required to make Carpetright a sustainable business,” the company said.

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