Merrill Exits Debenhams

Merrill Lynch Global Private Equity has completed a full exit from UK department store chain Debenhams PLC, two years after floating the business with fellow private equity investors CVC and Texas Pacific Group. Merrill Lynch sold the shares at a discount of 16% to yesterday's price of 71.5 pence. The news caused Debenhams shares to slide by 14% to 61 pence this afternoon.

Debenhams' stock has been dropping since the company was brought to market with an offer price of 175 pence, equivalent to a market capitalisation of Gbp1.7bn, in May 2006.

Merrill Lynch and co-investors CVC and Texas Pacific Group delisted Debenhams in 2003 for Gbp1.72bn. A refinancing shortly after the original acquisition enabled the institutions to take out a substantial amount of their money prior to the flotation. After the IPO the backers were subject to a lock-in period before being allowed to fully realise their investments. It is reported that CVC and Texas Pacific Group are to retain their stakes in Debenhams for the time-being.