Newspaper article The Evening Standard (London, England)

Kingfisher and Sir Geoff Beat Embarrassment Factor

Newspaper article The Evening Standard (London, England)

Kingfisher and Sir Geoff Beat Embarrassment Factor

Article excerpt

Byline: FIONA WALSH

SO SIR Geoff has pulled it off. Barring an 11th-hour banana skin, Kingfisher's chief executive Sir Geoff Mulcahy should soon be able to announce the group has succeeded in getting away one of Britain's biggest-ever rights issues.

When first launched, the one-forone cash call was at a 50% discount to Kingfisher's 310p price.

But the shares tumbled amid the market turmoil and things looked grim for a while. As the shares touched 157p at one stage, it seemed as if the underwriters might really have to earn their pound sterling40 million fees.

The shares recovered to 1933/4p yesterday, helped by some handy rumours that the giant Home Depot of the US could be measuring up the group for a bid.

As the pound sterling2 billion issue was underwritten, Kingfisher was always going to get its money. But the strong take-up avoids fresh embarrassment for a group and chief executive that have attracted more than their fair share in recent years.

The cash will help pay for Kingfisher's pound sterling3.3 billion takeover of Castorama, the French DIY group.

Not everyone is convinced of the merits of the deal, though, and once the post-rights euphoria has evaporated Kingfisher will have its work cut out to make it succeed.

Early signs for cross-Channel co-operation were not auspicious, with the French resorting to the courts to block the takeover. Constructive discussions are said to have been held in recent weeks, however.

Meanwhile, the price for getting the cash call away - Sir Geoff 's head - means that the architect of the Castorama deal will not be staying around at Kingfisher long enough to see it reap the rewards.

Sweet and sour THE revenge of the old economy is sweet. At the height of the newmedia madness, shares in Greggs halved as the Geordie baker committed the ultimate crime - it had no internet strategy, no plans to Fiona Walsh City Comment deliver sausage rolls to your door via internet orders or to buy a dot com start-up. …

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