Carpetright CEO Mulling Takeover

Rainham, England, June 18, 2007–Carpetright Plc, Europe’s largest carpet retailer, authorized chief executive officer Philip Harris to look into buying the shares he doesn’t already own, triggering the stock’s biggest jump since trading began in 1993.

No offer has been received yet, and a transaction may not take place, the company said today in a statement. Harris, who started Carpetright in 1988 with a single store in East London, owns about 23 percent of the shares.

The CEO is considering a takeover after the stock dropped as much as 23 percent this year, hurt by slowing sales linked to higher interest rates. Carpetright, which has about 510 U.K. and Irish shops and more than 100 outlets elsewhere in Europe, agreed last month to acquire the 30-site Storeys chain to increase its presence in northeastern England.

“It’s been rumored for four years, and now it looks like he may do it,” said Richard Ratner, an analyst at Seymour Pierce in London. “Maybe he thinks because it’s a depressed time in terms of numbers, it’s a good time.”

An independent committee that’s being advised by Deutsche Bank AG gave its approval for Harris to explore a bid, the statement shows.

The stock gained 314 pence, or 31 percent, to 1,340 pence in London. The jump boosted the value of the holding not controlled by Harris to about 700 million pounds ($1.3 billion). The shares fell as far as 1,013 pence, the year’s lowest price, on June 8.

Carpetright said April 12 that sales in stores open at least a year fell 5.2 percent in the previous 10 weeks as higher interest rates prompted Britons to pare spending on houses. The Bank of England has raised its benchmark interest rate to 5.5 percent to help control inflation.

The company is scheduled to report results for the fiscal year ended April 28 on June 26.