12/10/2010 12:12:00 PM
BC bids £50m below Phones 4u asking price
BC Partners’ bid for Phones
4u could be up to £50m below expectations after a funding deal fell through at
the 11th hour.
Phones 4u owners, Providence
Equity Partners, is asking a minimum of £700m. However, BC Partners came up with
a £655m to £680m offer on Thursday after the bank debt it had arranged via
Deutsche Bank fell through at the last minute.
According to the Daily
Telegraph, failure to raise the funding forced BC, the sole bidder, to go to the
European high yield market. It is understood Goldman Sachs is arranging up to
£450m of junk bonds that will cost BC an extra 4% a year in interest charges
preventing it hitting Providence’s
target price. Private
equity group Blackstone and Everything Everywhere are said to be among the
parties originally interested in 450-store Phones 4u but both subsequently
pulled out of the sale process.
Providence bought Phones 4u for £1.4bn in 2006
from John and Brian Caudwell.