Kesa looks at Comet sell-off

 
Marion Dakers
KESA Electricals has held meetings with activist shareholder Knight Vinke to discuss selling or restructuring its struggling high street retailer Comet, several sources confirmed yesterday.

Kesa, which was spun out of the Kingfisher retail group in 2003, could also end up de-listing from the FTSE 250 to leave it solely listed in France, its main market, one source added.

Knight Vinke, a New York-based asset manager, has spent about a year building its stake in Kesa to 18 per cent, and has met with management several times to thrash out an acceptable turnaround plan.

The company has already booked an £18m exceptional charge linked to overhauling Comet, which last week announced a 14.5 per cent drop in revenues since the start of the year – enough to wipe out the growth seen in every other branch of Kesa’s business.

A withdrawal from the UK could leave Kesa free to focus on its profitable assets, which include the Darty electricals retailer in France and the BCC retail chain in the Netherlands.

But Kesa is keen to avoid a company voluntary agreement (CVA) to try to salvage Comet, which would involve cutting deals with landlords and creditors in a similar way to JJB Sports earlier this year.

UBS, house broker to Kesa and an adviser to the firm on its options for Comet, said in December that it expected Knight Vinke to push for a disposal.

The activist investor has also pushed for change at Carrefour, HSBC and Italian energy group Eni through its shareholdings.

Knight Vinke and Kesa both declined to comment yesterday. Kesa’s shares closed at 137.6p on Friday, giving the firm a market cap of £747m.