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6 March 2017

Some people are getting their lingerie in a twist over the sale of Agent Provocateur

Lisa Wright

Founders of businesses can often still be emotionally attached to a business even after they have sold it on, and the announcement this week that 3i have sold Agent Provocateur to Four Holdings, a company part owned by Mike Ashley's Sports Direct, seems to have proved this point.

3i acquired Agent Provocateur from its founder Joe Corre, the son of Vivenne Westwood, in 2007 for a reported GBP 60m, and this week's sale is as a result of the company being put into administration after 3i failed to find a buyer earlier this year.

On the face of it, Mr Corre's anger appears to be about the fact that the company was disposed of via the route of a "pre-pack", i.e. where the deal is structured allowing Four Holdings (the acquiror) to agree to the sale of the assets before buying the business and putting it into administration. This means the administrator can sell the assets immediately, without consulting the unsecured creditors, who are likely to lose most of their money.

Mr Corre is quoted as saying that there was another buyer prepared to pay more than Four Holdings, but I can't help but wonder if this is more about reputation than price. Sports Direct and Mike Ashley have a reputation for "pile it high, sell it cheap", whereas Agent Provocateur has always tried to bring a more exotic and upmarket approach to underwear shopping.

Sports Direct do seem to be keen to move themselves more upmarket. Acquisitions of stakes in designer clothing chain Flannels and struggling fashion retailer French Connection demonstrate this and its involvement via Four Holdings in Agent Provocateur would further support this strategy.

LIsa Wright

Lisa Wright, Managing Director, M&A products

A regular blogger on this site, Lisa shares her analysis and opinion on news and trends in M&A, private equity, venture capital and IPOs.

A regular blogger on this site, Lisa shares her analysis and opinion on news and trends in M&A, private equity, venture capital and IPOs.

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