Debenhams chiefs' £2m stake

DEBENHAMS chief executive Belinda Earl and her management team are putting £2m of their own money into the £1.54bn buyout from private equity firm Permira.

The cost of their investment will be more than covered by profits from share options triggered when the deal goes through, with Earl in line to collect £3m and finance director Matthew Roberts almost £2m.

Permira formally launched its 425p-a-share cash offer today, after securing a board recommendation.

But the department stores group said it will continue talks with rival private equity bidders CVC Capital Partners and Texas Pacific in the hope of a higher offer. Some shareholders have been angered by its decision to pay up to £6m to the rival bidders in an effort to encourage another offer.

Debenhams said the bid from Permira, made in partnership with Blackstone and Goldman Sachs, is 'worthy of serious consideration in the absence of a higher offer being received'. Permira partner Charles Sherwood said the management's £2m investment will give them a 6.9% stake in the new company.

The bid is being made via Laragrove, a new company, which will be 37.5% owned by Permira. Blackstone and Goldman Sachs will each have 20.8% while some 10% has been set aside for management, including the 6.9% for the existing team.