Cerberus eyes Jaguar

• Edmund Truell has confirmed that Vision Capital will buy 75% of off licence chain Threshers together with the whole of BrightHouse, the retailer of home appliances and furnishings which emerged out of TV rental business Thorn. Truell led the consortium of financial investors that bought these businesses, as well as the £1.2bn Thorn pension scheme and hotel digital TV provider Quadriga, from Terra Firma within the last few weeks. The consortium will receive over £250m for these assets and retain 25% of Threshers, principally so that Truell’s Pensions Insurance Corporation (PIC) offer services to the Threshers pension fund. £32m cash has been put in escrow to address the “significant deficit” it has.

• 3i, the UK private equity firm, has agreed to acquire Eltel Networks from Swedish private equity firm Industri Kapital 2000 Fund and Telefos. Eltel provides construction and maintenance services for telecommunications and electricity networks in Europe. In 2006, its turnover was € 756m and it has 8200 employees primarily in the Nordics, Baltics and Poland.

• Cerberus has acquired Apax and Duke Street owned DIY business Focus. The deal comes after a strategic review of the business headed by Rothschild. The review centered on the company’s senior debt covenants and financing structure and involved its senior lenders as well as a committee of mezzanine note holders and shareholders. Cerberus will pay a nominal fee for the company’s equity, while paying off its £174m debts. It will also pay its mezzanine bondholders 40p for every £1 they hold, coming to £40m. Meanwhile, Focus bond note holders will be able to invest £21m in exchange for equity in the acquisition vehicle.

• HgCapital’s investment in RidgeWind takes its European wind farm portfolio to more than €1.48bn. HgCapital has acquired a ‘substantial’ equity stake in Oxfordshire-based wind developer RidgeWind for an undisclosed sum. The transaction involves the purchase of a majority stake in the company, expansion capital and long-term equity for RidgeWind’s development pipeline. The move follows the purchase of a French wind farm portfolio from Germany’s Enertrag for €69m in early May of this year.

• TowerBrook Capital Partners, a UK-based private equity firm, has sold France’s InfoPro Communications to Apax Partners. No price was disclosed for the transaction, in which Apax bought a 44 percent stake in the French professional information group. Since 2001 the business has achieved growth averaging more than 30 percent a year over the last five years and is expected to generate revenues of €70m this year.

• Unity Investments has disclosed a 4.87% stake in Debenhams, the London department store group. Unity Investments consists of Icelandic investors Baugur and FL Group and UK retail entrepreneur Kevin Stanford. Debenhams has issued three profit warnings since December. The group returned to the stock market in May 2006 with a share price of 195p after 2-1/2 years in private hands


– which bought number three US car maker Chrysler in May for US$7.4bn (€5.5bn) – is thought to have held recent talks with Ford over buying its luxury car brands Jaguar and Land Rover. So far, those talks have been inconclusive.

Codenamed “Project Swift”, Ford is understood to have appointed Goldman Sachs, HSBC and Morgan Stanley to find buyers for the two luxury car brands with an estimated price tag of £4bn (€5.9bn).

“We are working with our financial advisers on the best options for Jaguar and Land Rover, and nothing is ruled out,” said Ford spokesperson John Gardiner last week.

Other private equity bidders that may emerge include Cinven and Blackstone.

Motoring entrepreneur David Richards could also enter the race for Jaguar and Land Rover. He was part of the consortium that bought Aston Martin from Ford for £479m (€737.7m).

Automotive services company Magma Group, headed by Martin Leach, the former head of Ford Europe, might join up with a financial sponsor in any forthcoming bidding.

Having taken on a US$18bn loan, Ford’s executive chairman William Clay Ford Jr and president and CEO Alan Mulally are under pressure from banks and shareholders to turn around the ailing car business. The group made a substantial loss of US$12.7bn on revenues of US$160.1bn last year.

Selling loss-making Jaguar and Land Rover to private equity will free senior Ford management to focus instead on the core car business and save the iconic motor manufacturer from bankruptcy.

Ford’s Premier Automotive Group – which includes Jaguar, Land Rover and Volvo – made a pre-tax loss of US$327m on sales of US$30bn in 2006. But the combined pre-tax loss of Jaguar and Land Rover came to US$1.6bn.

Land Rover and Jaguar are likely to be sold together, since they share the same platform technology as well as some production facilities in the UK, although selling them separately also remains an option.

Jon Moulton, a founding partner of private equity group Alchemy Partners, has so far only shown an “emotional” interest in Jaguar and Land Rover. He does not believe that they can be “asset-stripped”.

A Middle Eastern or Russian investor could still come out of the woodwork for Jaguar and Land Rover.

Russia’s wealthiest man, Oleg Deripaska, has said he will invest US$1.54bn in Magna International, Canada’s largest auto parts maker, which had also been in the running to buy Chrysler. Deripaska’s investment vehicle, Basic Element, owns Russian Machines, which holds an interest in Gaz Group, Russia’s second-largest automotive company.

Adam Durchslag