Interflora rejects mystery bid

INTERFLORA directors, who stand to gain if a deal to sell the florists' network to venture capital firm 3i goes through, turned down a better offer for the business.

They received an offer 20% higher than 3i's £23.3m, which the board of the florists' network hopes members will vote through on January 23. Sketchy details of the proposal are contained in the scheme of arrangement sent to members.

The would-be buyer apparently was not a venture capitalist and might have been one of the big supermarket chains that have been slowly breaking into the flower delivery business.

A steering committee set up to oversee the board's handling of the proposed sale said that few Interflora members would support a trade sale.

The committee forced the board to agree to an early-exit penalty with 3i to try to prevent the venture capitalist selling the business to a trade buyer in a short period.

If Interflora is sold within a year, the first £4.3m of any net proceeds above £21.7m will be paid to members.

They would also have the right to buy back Interflora if 3i did sell, but the committee warned that the process would be complex.

The documents also reveal that if Interflora does not carry on with the sale to 3i, it will have to pay the venture capital group up to £217,000 in costs.