Selfridges soars as Ritblat builds stake
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Your support makes all the difference.SHARES OF Selfridges, the luxury London department store, soared yesterday on news that the property giant British Land had built up a stake in the company, fuelling takeover speculation.
Selfridges,which was spun off from parent company Sears last month, closed up 8.31 per cent to 221.5p, following the announcement that British Land, headed by chairman John Ritblat, held a 3.15 per cent stake. Shares in British Land firmed 6p to 566p.
City analysts said that news of Ritblat's interests had triggered speculation that he could be interested in taking over Selfridges flagship Oxford Street store where the company owns the freehold. They speculated that British Land could be keen to capitalise on the property value of the store, leaving the retail side to the existing management. "I think British Land would be interested in the property angle and in particular in maximising the value of the Oxford Street store," said one analyst who declined to be named.
However, sources close to British Land denied that the company, which owns an large retail property portfolio, was looking at a takeover bid. They added that British Land was interested in Selfridges as an investment and had probably been attracted by the cheap rating of the stock.
Selfridges shares have been trading at below net asset value of 215p a share for the past few weeks after enjoying a higher than expected flotation price of 236.5p. Property analysts noted that when share prices dip below the underlying asset value of the company, they are considered as good value by investors.
Mr Ritblat said: "We like the investment... and we like the price". Asked whether his company would buy more shares in Selfridges, he said: 'That would depend on the price". He said the stake had been built relatively recently.
Selfridges large shareholders are mainly institutions, which held stakes in Sears and bought into the company at the time of the demergers.
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