Debenhams gets second suitor

Department store group Debenhams has confirmed speculation that a second bid for the group has come from venture capital firms CVC Partners and Texas Pacific.

But analysts have suggested a much higher offer will be needed for either bidder to win the prize.

Debenhams became the centre of retailing's latest bid battle last month when it revealed that it had been approached by a second party with a possible takeover offer.

The 200 year old chain surprised the market earlier in June with news of a bid approach from the private equity firm Permira Advisers, valued at 425p per share or about £1.5m.

Debenhams said it was now in discussions with both parties.

Sales rise

The department store chain confirmed the recent speculation as it reported improved trading in recent weeks.

I don't want to feel as though the company is being given away Mike Felton, ISIS fund managers

Sales rose 3.8% in the 20 weeks to 19 July, while margins improved by 0.6%.

The results showed an improvement of previous sales trend, which had shown growth of 3% in the six weeks to 12 April.

Analysts said the strong trading suggested a bid of 425p per share was too low.

"I don't want to feel as though the company is being given away," said Mike Felton, head of retail equities at ISIS fund managers which owns 2.5% of Debenham's shares.

Shares rose almost 2% on the latest update to 424p, compared with 330p before news of the bid talk began.

Chief executive Belinda Earl and finance director Matthew Roberts caused controversy by saying they helped Permira formulate its bid and planned to stay on and take a stake in the company if the bid succeeds.

The pair said they were now helping the rival bid group.