Fashion duo John Hargreaves and Cafer Mahiroglu top bids for BHS with £85 million offer

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The men behind the Matalan and Select fashion chains have emerged as the front-runners to buy collapsed retailer BHS for a bumper £85 million, insiders have claimed. 

After a final deadline yesterday for bids to buy the 164-shop retailer, sources said a last-minute offer from Matalan founder John Hargreaves and Select’s Cafer Mahiroglu was at a “very good price”. 

Other contenders for the whole Brixton-founded business still include Mike Ashley’s Sports Direct, Edinburgh Woollen Mill boss Philip Day and an unnamed fund. 

The size of the deal could provide some comfort to creditors. 

Secured creditors were owed £124.2 million while unsecured creditors were owed approximately £1.3 billion, according to documents compiled for BHS’s company voluntary agreement in February by KPMG.

But administrator Duff & Phelps is still sifting through the offers and no decision on a buyer has been made. It declined to comment on Thursday.

It had hoped to select a buyer by the end of the week but it is understood the complexity of the bids may mean that the process could drag into next week, leaving BHS’s 11,000 staff on tenterhooks.

Nick Hood, business risk adviser at Opus Restructuring, said: “The rumoured bid price certainly looks full, but the bid is led by a retailer with a well-justified reputation for succeeding in the market which BHS so utterly failed to serve in its latter days.”

The offers follow the collapse of BHS in April, 13 months after it was sold by Arcadia tycoon Sir Philip Green for  £1 to Retail Acquisitions.

That company was led by Dominic Chappell, who has been bankrupt three times. 

Although the retail stalwart had come under fire for not adapting to the modern retail world, chief executive Darren Topp and the former owner had worked over the past 12 months to spruce up the business and make it more attractive.

But BHS ran out of cash after Retail Acquisitions failed to secure enough funding for a turnaround plan. It had a £571 million pension deficit, which could be put upon the taxpayer.

Conlumino retail analyst Neil Saunders added: “Without its pension deficit there is no doubt that BHS is a more attractive prospect for bidders.”

MPs on the business select committee are continuing to put together a list of witnesses to be questioned about the failure.

Those expected to appear include Anthony Gutman, the Goldman Sachs banker who informally helped Green on the sale last year.

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May 18, 2016 |
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