GUS beats rivals to buy internet e-tailer Jungle.com in £35m cash and debt deal

Great Universal Stores, the country's largest mail-order company, yesterday threw a lifeline to Jungle.com, the high profile internet e-tailer, when it agreed to buy the privately held firm for £35m in cash and assumed debt. It beat rivals Kingfisher and Dixons to secure the acquisition.

Great Universal Stores, the country's largest mail-order company, yesterday threw a lifeline to Jungle.com, the high profile internet e-tailer, when it agreed to buy the privately held firm for £35m in cash and assumed debt. It beat rivals Kingfisher and Dixons to secure the acquisition.

GUS, which owns the Argos high street catalogue business, will pay £23m in cash and take on an estimated £12m in debt.

Further investment in Jungle to grow the business is planned.

Steve Bennett, Jungle's founder and chief executive, will net around £7m from the sale but will stay with the company on a four-year contract. Other senior management are committed to staying with Jungle for two years.

John Peace, chief executive of GUS, said: "There is a strong strategic fit between these two businesses. For the first time, GUS will be able to offer its customers a wide range of computer and office products via the most convenient channel, be it ordering via store, catalogue or internet, for delivery to store, home or work."

The link-up will also significantly increase Argos's presence in the home office furniture and accessories market.

Jungle is Britain's second most recognised internet retailer after Amazon.com. The UK company had a pre-tax loss of £11.4m, including start-up charges of £7m, on sales of £75m in the year to July.

About £25m was generated via the internet with the remainder coming from mail order and telephone sales.

Auction site QXL and lastminute.com attracted investor interest in the wake of the Jungle deal and strong overnight gains on Nasdaq.

QXL jumped by 10.25p to 70p, while lastminute added 3p to 189p. GUS shares rose 7.5p to 495.5p yesterday on the news.