Micky Jagtiani shows up at Debenhams with stake buy

BANGALORE: Is NRI billionaire Micky Jagtiani ready to swoop down on UK retailer Debenhams? The plummeting shares of Debenhams flared up on London Stock Exchange on Tuesday as speculation about Mr Jagtiani showing up with a bid swept the trading floors.

On Monday evening, the London retailer notified the City watchdog Financial Services Authority about the Dubai-based entrepreneur building up 7.3% stake in the company.

Mr Jagtiani, a London cabbie-turned-retail tycoon, seemed to hold out Christmas hope to investors with Debenhams stock touching all-time low of 74p on Monday after profit warnings and lacklusture festive season sales. The stock that was quouting closer to 81p on Wednesday at the time of going to the press. It may be mentioned that Mr Jagtiani was touted as a suitor for Debenhams before the private equity investors took the retailer public in early 2006 at 195p.

Industry observers tracking Landmark Group said Mr Jagtiani was keen on effecting a big buy in UK’s mid-market retail, and Debenhams appears to fit the play. They pointed out his $3.5 billion bid for New Look earlier this year as evidence of his interest in mid-market businesses. Traditionally, Landmark and Jagtiani, have anchored operations around moderately priced retail.

Landmark declined to comment,when contacted.

So, with Debenhams shares languishing, the time would be perhaps ripe for Mr Jagtiani to go in for the kill. Incidentally, his old friend, the Icelandic group Baugur, holds 13% stake in Debenhams. This has put the inevitable spin of the two mounting a joint bid.

But industry observers feel Mr Jagtiani could be going solo with the backing of Baugur, which has substantial stake in high-end retailer House of Fraser. This rules out the Baugur from participating a takeover attempt as competition laws would pose hurdles.

Unlike in the case of US luxury retailer Saks, for which he is backing a Baugur bid, Mr Jagtiani is expected to take the lead for Debenhams given the strategic fit with Landmark as well as the wider Asian expansion possibility. Further, Debenhams has a reasonable store network in the Middle East covering Bahrain, Kuwait, Dubai, Qatar, Saudi Arabia and Sharjah.

In India, Debenhams has a franchise agrement with Planet Retail with the first store expected to open by early next year. Planet Retail has outlined plans to open 10 stores by 2010. The 56 year-old Jagtiani is at the helm of Landmark Group that operates over 600 stores in India, Middle East and Spain.

Hailing from Western India, the reclusive entrepreneur started off with a single store in Bahrain in 1973, with his $2 billion retail empire in the midst of frenetic expansion. Landmark operates several retail formats like department store Lifestyle, value fashion retail Max and hypermarket SPAR.