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Last-minute rescue bid for BHS emerges

Do Not UseDo Not Use 25/05/2016
BHS store © Getty Images BHS store

A consortium led by a former Mothercare boss is thought to be the frontrunner to rescue BHS.

Greg Tufnell, brother of former England cricketer Phil Tufnell, is leading Richess Group, a newly formed vehicle.

Other bidders, including Matalan founder John Hargreaves, are understood to have fallen out of the running.

Sources close to the process say that if no buyer is found soon, BHS is likely to be liquidated, putting the retailer's 11,000 staff out of work.

Administrators for the department store chain had hoped to strike a deal by the start of this week, but the emergence of the last-minute bid has delayed the process.

The Richess Group is thought to be backed by a wealthy Portuguese family.

Analysis: Simon Jack, BBC business editor

It is thought the Portuguese bid for the whole company as a going concern is currently the highest offer.

But, as the personnel and sources of funds are less well known than other bids, the administrator's due diligence may take longer than thought and stretch into next week.

In other words, the administrators are rowing back slightly from a previous warning that the company might be liquidated if no deal is done by close of business Friday.

Greg Tufnell was managing director of Mothercare from 1997 to 2000 and held a similar role at Burton, part of the Arcadia Group, for three years before that.

He is a director of House of Britannia, an investment firm that owns brands including glovemaker Cornella James, which counts the Queen among its customers.

Advisers questioned

Meanwhile City firms that advised on the sale of BHS appeared before MPs on Wednesday.

Mark Byers, a partner at Grant Thornton, said his firm was unable to give a full picture of the retailer's pension scheme because it was not given access to its trustees.

He said its audit reflected its "relatively limited" information on the scheme.

BHS was sold to Retail Acquisitions for a £1 in 2015.

It entered administration in April this year with a £571m pension deficit.

The group was headed by Dominic Chappell, a former racing driver who had previously been declared bankrupt.

Stephen Hermer, from law firm Olswang, which also advised Mr Chappell on the sale, declined to comment on Mr Chappell's business acumen or character when asked by MPs.

He said his firm's role was to carry out due diligence on the retailer.

On Monday, Goldman Sachs banker Anthony Gutman, told MPs that he had told a key executive from Sir Philip's company about the risks of selling BHS to Dominic Chappell.

Mr Gutman said he had told Paul Budge, finance director of Arcadia, about Mr Chappell's history of bankruptcy and lack of retail experience.

The two parliamentary committees, which are trying to ascertain what led to the retailer going into administration, also questioned the chairman of the BHS pension scheme trustee board, Chris Martin.

He revealed that his firm had received about £250,000 in fees from the pension scheme.

He also said the trustees had sought assurances that Retail Acquisitions had enough working capital before BHS was sold.

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