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ScS pulls out of running for Sofa.com acquisition

Furniture and flooring retailer ScS announced today (1 February) that it is no longer in discussions regarding a potential acquisition of Sofa.com.

ScS suggested earlier in the week that it wanted to acquire the business, which includes nine showrooms and a website, and it was reportedly in a two-way battle with Mike Ashley’s Sports Direct for the company.

Today’s bid withdrawal announcement would suggest it paves the way for Ashley to add to his growing retail empire, which was last year swelled by the takeover of House of Fraser and Evans Cycles. He is also reportedly in talks to acquire HMV, which entered administration after Christmas, and has an influential stake in Debenhams.

LGT European Capital owns Sofa.com and has appointed KPMG to handle the bids, although it is not clear what figure the online business is priced at.

There is no certainty a deal will go ahead at this stage, although with Sofa.com holding concessions in House of Fraser – they replaced ScS concessions which were removed in the final quarter of 2018 – Ashley is arguably in a prime negotiating position.

Sky News reported earlier this week that Ashley had sanctioned a multimillion-pound bid for Sofa.com, and that a deal was expected to be completed in the coming days.

LGT became Sofa.com’s majority shareholder in April 2018 April, and the business was previously owned by private equity firm CBPE.

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