Belfast Telegraph

Hedge fund hikes stake in Carpetright ahead of vote on store closures

Meditor Capital Management’s holding is close to the threshold at which is must make a takeover offer.

Carpetright’s biggest shareholder, Meditor Capital Management, has increased its stake in the business days before creditors vote on a rescue plan for the firm.

Meditor upped its stake in Carpetright from 16.5% to 29.99% on Monday, just shy of the threshold at which it would have to make a formal takeover bid for the retailer.

Meanwhile, another major shareholder, Franklin Templeton, reduced its holding from 16% to 1.7%.

Hedge fund Meditor agreed to support Carpetright in March when it made a £12.5 million loan to the company in exchange for new shares.

On Thursday, Carpetright’s landlords and creditors will vote on a rescue deal that could lead to the closure of 81 stores and the loss of around 300 jobs.

Under its Company Voluntary Agreement (CVA) – which is a form of insolvency aimed at protecting a business from going bust by cutting its costs – Carpetright will also be able to cut rents on a further 113 stores.

Other household names including New Look and Byron have pushed through CVAs following a squeeze on consumer spending.

Department store House of Fraser is also exploring a CVA proposal.

Carpetright – which employs nearly 2,700 staff in total – has also confirmed an investor cash-call to raise around £60 million through a rights issue to put the company on a firmer financial footing.

Carpetright declined to comment.

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.