Hong Kong investor joins bidding war for majority stake in Clarks

Clarks Alteri Investors Lion Rock covid-19 pandemic Giorgio Presca
Discussions about a deal are expected to conclude in the next month
// Hong Kong-based investor Lion Rock joins list of bidders for Clarks retail chain
// Clarks is likely to retain an equity stake in the business if a deal goes ahead
// The retailer was first in discussions about a share sale in May

Clarks has reportedly seen a Hong Kong-based investor join the list of bidders interested in a majority stake in the retailer, as it seeks refinancing amid the Covid-19 pandemic.

Private equity firm Lion Rock is one of two remaining bidders for the 195 year-old footwear retailer, Sky News reported.

If the deal goes ahead, it could end two centuries of majority family ownership at Clarks.

READ MORE: Clarks a step closer to securing minority stake sale with investors

Discussions about a deal are expected to conclude in the next month, and are said to include a rival bid from Alteri Investors.

Moreover, the Clark family is likely to retain an equity stake in the business, which may be reduced to less than 50 per cent – depending on the discussions.

Clarks first revealed discussions about a share sale back in May, with around £100 million and £150 million likely to be injected into the business as part of any deal.

The company’s chief executive Giorgio Presca said at the time that its new strategy ‘Made to Last’ will aim to transform it amid the pandemic.

Clarks said at the time that the strategy will result in 900 job losses, and 200 new roles.

The retailer said it is “currently reviewing options to best position our business, our people and the Clarks brand for future long-term growth”.

A string of accountancy firms are working on a restructuring of Clarks as it continues to struggle with trading amid the pandemic.

The chain’s family shareholders have drafted in KPMG to advise them, while Deloitte has been hired by the management team.

PwC had been appointed by a syndicate of the footwear chain’s lenders as they assess the Covid-19 impact on its prospects.

Meanwhile, investment bank Rothschild is also advising the company.

Clarks trades from about 345 stores in the UK, employing thousands of people, but has denied that it will be exploring a CVA.

The retailer has furloughed thousands of its store staff under the Coronavirus Job Retention Scheme.

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