Sir David and Sir Frederick Barclay, the gothic twins who run a property, retail, media and hotel fiefdom from a £60m castle on their privately owned tax haven of Brecqhou in the Channel Islands, are poised to acquire the home shopping assets of British retail giant GUS.
Negotiations continued through the holiday weekend with the aim of inking the deal – estimated value £500 million ($819.30m; €693.57m) – before GUS unveils its annual results Wednesday. Brandishing the Mont Blancs for the cameras, however, will not be the end of the matter as the acquisition will almost certainly attract the attention of the Competition Commission.
The intervention of the regulator is a foregone conclusion given that the Barclay duo already own Littlewoods – the only rival of significance to GUS’s direct selling activities. The twins last year dug £750 million from their vaults to add the former to their portfolio and the merging of the two home shopping giants would hand them around 30% of the British catalogue-retailing market.
Any regulatory scrutiny, however, is likely to be perfunctory. Not only will the parties already have conducted soundings with the regulator before progressing the deal to its current stage; they argue that in a declining market merger is the only way of securing the future of the businesses.
GUS’ catalogue business has 2.8 million active customers, annual sales of £1.5m via a number of catalogues including flagships Choice and Great Universal, and employs 4,180 people in its home shopping division, mostly in Manchester.
The Littlewoods business has a payroll of 3,400 in the nearby Liverpool/Crosby conurbation, and a done deal would almost certainly result in a jobs massacre.
In 1997, Littlewoods’ acquisition of rival Freemans was blocked by the Blair administration on grounds it would give the merged group 25% share of the market. But it is feared locally that the government will not be so pernickety this time – not least because premier Blair three years ago greenlighted knighthoods for the omnivorous twins, ostensibly for their services to charity.
Data sourced from: Telegraph.co.uk; additional content by WARC staff