Saudi Arabia's Public Investment Fund is set to become a minority partner in UK department-store chain Selfridges after buying out the position of the now-insolvent Signa Group.
The PIF will take a 40 per cent stake in both the property and operating businesses of Selfridges, according to an emailed statement from current co-owner Central Group. The Thai retail conglomerate will own a 60% stake, with the deal including new investment from both shareholders to shore up Selfridges' financial position.
The PIF has signed a binding agreement for a total buyout of Signa's interest in the department store chain, the statement said. The terms were not disclosed.
The tie-up follows the collapse of Central's joint-venture partner Signa, the real estate and retail company founded by tycoon Rene Benko. Signa's main property units are currently in insolvency processes in Austria, with the heavily indebted group one of the most notable victims of the downturn in the real estate sector.
"We are pleased to be partnering with Central Group in Selfridges Group, one of Europe's most iconic luxury department stores," Turqi Al-Nowaiser, deputy governor and head of international investments division at PIF, said in a statement. "This transaction allows Selfridges Group to build on its position as a premier retail destination."
Selfridges is just one of Central's joint ventures with Signa, and the collapse of the Austria-based group has precipitated an overhaul of several other investments. Central has moved to take over the operating companies of the Swiss luxury department store chain Globus as well as KaDeWe's operating company and flagship store in Berlin.
The PIF already held a 10 per cent stake in Selfridges' properties after a Signa unit syndicated out a portion of its 50 per cent stake to the Saudi sovereign wealth fund.
Selfridges was founded in 1908 by Harry Gordon Selfridge and is best known for its sprawling store in London's Oxford Street. The group operates 18 department stores in three countries, including Selfridges in the United Kingdom, De Bijenkorf in the Netherlands, and Brown Thomas and Arnotts in Ireland.
"We welcome PIF as our investor alongside majority shareholder Central Group," a spokesperson for Selfridges said in emailed comments.
