Focus DIY set for £1 sale

The UK’s third-largest DIY chain, Focus, is set to be sold to US hedge fund Cerberus for just £1 after hitting serious financial problems.

Current owners Apax Partners and Duke Street Capital have agreed to sell their Focus shares for a nominal sum to terminate their involvement with the firm.

The proposed deal would also see Cerberus pay off about £225m in debt amassed by the retailer.

Rising interest rates and a weak DIY market have hurt the 250-store firm.

The proposed takeover would see new management being brought in to run the company, but it is not yet clear what the implication would be for the firm’s workforce of over 7,000 staff.

‘Potential’

Like other DIY retailers, Focus has struggled in the past 18 months as many consumers have prioritised spending in other areas and supermarkets have moved into the sector.

The firm has been struggling to pay the interest on its debts and has been in talks with its shareholders and debt holders about a possible sale and other ways of restructuring its finances.

The firm said the deal would be good for its employees and customers.

“Focus has the potential to be one of the most successful operators in the DIY sector,” said Bill Grimsey, who will become chief executive if the deal is concluded.

“In recent years, development has been constrained by its capital structure and uncertainty. With the resources and commitment of Cerberus, we will have the opportunity to exploit its potential in a fundamentally attractive market.”

The deal is conditional on the support of firms holding 90% of the firm’s debt and clearance by the European Commission.