Top buyout firms bidding for Shop Direct reported to walk away

Shop Direct, the retail group owned by Barclay brothers, might have just lost two of its more lucrative pretenders. Investment firms including Carlyle and CVC Capital Partners would have reportedly opted not to submit bids.

According to bankers close to the process quoted by Sky News Friday, both firms –some of the world's biggest buyout firms – are understood to have walked away from potential bids for Shop Direct amid concerns about its reliance on revenues from a vast consumer credit arm. However, some analysts believe that increasingly onerous regulation of consumer finance activities will deter private equity firms from paying a premium price for Shop Direct, which is among the biggest retail providers of credit in the UK, informed SkyNews.

But Carlyle and CVC Capital Partners haven’t been the only buyout firms talking to Shop Direct; Advent International, Bain Capital, BC Partners‎, Cinven and Permira would have shown an interest in buying the retailer, although it remains unknown whether any of them had tabled formal bids.

It’s worth recalling that this is the first time since they acquired Littlewoods 15 years ago that the online retailer’s owners, also behind the Daily and Sunday Telegraph newspapers and the Ritz hotels, are exploring a sale.

Other sources cited pointed out that the target price tag for the company will surpass the 3 billion pounds mark.