Ahmed faces Moss Bros tactics probe

FASHION entrepreneur Shami Ahmed was facing an investigation by the Takeover Panel over his tactics in stalking ailing menswear chain Moss Bros.

Lawyers for the retail group have filed an official complaint over Ahmed's 'approach' to buy the company, made late last week. No formal bid has yet been tabled, although Ahmed's advisers at WestLB Panmure were today said to be considering their next move.

WestLB met Moss Bros chairman Keith Hamill at the retailer's lawyers Linklaters late last week to request detailed due diligence information that it said was needed to secure the financing to proceed with an offer priced at around 40p - or £36m. The shares edged up 1 3/4p to 39 1/2p.

Linklaters is expected to complain about the tactics in a letter to the Panel, which is also likely to raise the subject of unusual share price movements last week.

The Moss Bros board unanimously rejected the request for due diligence information on the grounds of what it described as the 'wholly inadequate' price indication and the apparent lack of funding to back the offer. The extent of the information demanded led them to suspect nervous banks were putting up most of the funds for Ahmed's possible offer.

Ahmed responded: 'Given the uncertainty surrounding the company, it is inevitable that any bidder would require a certain amount of due diligence, particularly given the absence of any trading update in January.'

A spokesman for Ahmed, who made his name with the popular Manchester-based street clothing brand Joe Bloggs in the 1990s, said he had funding in place with HBOS. He stressed that the indicated price was generous when put against the 28p value of Moss Bros shares before 7 December, when Ahmed's intentions were made clear.

Whatever the outcome of the Takeover Panel's review, Moss Bros's complaints are symbolic of its displeasure at Ahmed's attentions. If he is to be successful, he must win the hearts of the Moss family, which owns 22%, and the Gee family, who founded Moss Bros subsidiary Cecil Gee and own 17%.

Sources in Moss Bros said he had not yet approached either Rowland Gee or Peter Moss, the heads of the two families, who were backing the appointment of chief executive Adrian Wright, former managing director of the Bluewater shopping centre. Ahmed's Legendary Investments vehicle has built up a 5.42% stake in Moss Bros.