Managers on course for Oasis buy-out

Oasis: shunned by investors, and Christmas shoppers

Store chain Oasis is set to be taken into private hands, after managers at the clothes seller won boardroom backing for a £54m bid.

A management team led by chief executive Derek Lovelock looks certain to win a six-month race to buy the retailer, after winning the support of independent directors and 42% of shareholders.

The buy-out team, backed by an investment arm of insurance giant Prudential, said it could now "focus on the needs of the business in order to rebuild profitability".

Michael Bennett, Oasis chairman, and independent of the bidders, said that representation of both venture capitalists and industry experts in the takeover team made it "the most attractive" bidder.

A "number" of other bidders had also expressed an interest in the firm, a statement on Friday said.

Investors slammed

The buyout follows a troubled period for Oasis, which has seen its share price drop from more than 400p in 1997 to 51p in November.

Oasis's independent directors have blamed the fall largely on the whim of investors who have shunned small firms in favour of FTSE 100 giants.

"The company continues to suffer from poor investor sentiment toward the smaller company sector, and in particular companies operating in fashion retail," Friday's statement.

This concern has been echoed by other business leaders, including Norfolk turkey baron Bernard Matthews, who last year took his firm back into his own hands.

But Oasis has also revealed shrinking profits in the last two years, with poor Christmas trade blamed for the falls.

Sales have, however, revived this year, although it is too early to gauge whether the rise is sustainable, Friday's briefing said.

Preferred bidder

Oasis in January revealed management interest in buying the retailer, and in June granted Mr Lovelock's team priority clearance in pursuing its bid.

The offer values Oasis shares at 103p, a 64% premium to their level when the offer talks were announced, although below a 106.5p closing high hit last month as speculation mounted over the bid.