Brakes signs deal to take over Woodward

Baugur, the largest investor in two major wholesale businesses, has sold its stakes to concentrate on its retail interests.

Booker Group moved closer to its target of a listing on the London Stock Exchange after the Icelandic company sold its stake in the company.

Booker chief executive Charles Wilson said he was very pleased by the move. He told ProWholesaler: “Baugur was a good investor but this will mean we will have more institutional shareholders and will help with our aim to move to the main market.”

Booker is currently quoted on the Alternative Investments Market, but says it wants to move to the main market by June next year.

Shortly after the exit from Booker, Baugur also announced the sale of Woodward Foodservice to Brakes subject to approval by the Office of Fair Trading. Under the deal, which includes all eight of Woodward’s distribution centres, which are based in the Midlands, northern England, Wales and Scotland, Woodward management will continue to manage the brand under the ownership of Brakes.

Frank McKay, Brakes Group chief executive officer, commented: “I am delighted we have been given the opportunity to join forces with Woodward Foodservice and I look forward to welcoming Woodward’s employees and customers to the family of Brakes companies.”

Jeremy Woodward, managing director of Woodward Foodservice, said: “Brakes business strengths will help us continue to offer Woodward’s customers excellent products and service as well as providing new opportunities for our respective businesses in the future.”

However, the hurdle of regulatory approval may prove a tough one to overcome because the last time there was a major takeover involving Brakes, customer opposition managed to get it blocked.

In June 2002 Bidvest, the owner of 3663, tried to buy Brakes, but when the OFT said it would refer the deal for investigation Bidvest pulled out.

In his report the Director General of Fair Trading said: “We received a significant number of cogent representations from customers, including some large national customers… they have raised concerns about the ability of national foodservice customers to switch to regional suppliers or logistics companies. In view of the number, source and quality of these comments, I would advise against clearance without this merger being investigated more fully.”

Baugur said the two deals were in line with its focus on its retail investments, but it is still left with another substantial foodservice Features > Business, DBC.

Woodward acquired DBC in August 2006, but after a credit squeeze on Woodward, Baugur ran them separately.

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