Investment bank Goldman Sachs has adamantly denied the rumour that it is interested in purchasing the New Look fashion chain and has publicly refuted claims that is was entering the bidding for it. The bank’s executives are said to be irate at the suspected involvement of Merrill Lynch, whom they suspect started the rumours in more an attempt to garner more interest for the sale, reports the Financial Times. The paper, however, also learned that there had been a real basis for the rumours, as Goldman Sachs was said to have attempted to build a consortium to buy the chain three weeks before. The consortium was comprised of Tom Singh, New Look’s founder; Landmark International, the group’s Middle East franchise partner, and a selection of hedge funds. At the time, the consortium demanded Merrill Lynch stop the auction and give it exclusivity, but the demand was not met by Merrill and Goldman Sachs then quit the proceedings without showing further interest.
Meanwhile, only two parties have shown interest in the chain and are bidding below the asking price of £2 billion – the valuation made by current owners Apax and Permira. Warburg Pincus and TPG Capital, and BC Partners are said to have bid between £1.6 billion and £1.8 billion. This is a blow for Merrill, who was already widely criticized for the way it handled the sale of Sports Direct International. Merrill managed the IPO, and the sporting goods company proceeded to lose almost a third in value after only three months on the stock exchange. An added embarrassment for Merrill is the poor performance of Debenhams, which it – along with three other banks – took public three years ago. Although, Merrill is not in any way responsible for the department store chain’s poor track record, its past connection to the group does little for its reputation. In the meantime, Merrill insists that the New Look auction is still on track.