African investment heavyweight Brait SE has said it will pay £780 million for virtually all of budget clothes retailer New Look, giving it a substantial presence in Britain's fiercely competitive fashion retail market.
The deal puts Brait, whose top shareholder is South African retail mogul Christo Wiese, in the middle of the crowded British high street, where New Look vies with the likes of Primark, Next and H&M.
New Look, owned by private equity groups Apax and Permira as well as founder Tom Singh, has 600 stores in the UK and Ireland and trades from a further 200 across Europe, North Africa, the Middle East and Asia.
It is the second big deal in a month for Brait, one of Africa's largest investment houses which is also buying fitness chain Virgin Active.
Brait will take a 90 per cent equity stake in New Look. The size of the deal gives the retailer an enterprise value of £1.9 billion, which includes £1bn in debt.
The remaining stake will stay in the hands of the founder family and management.
New Look had been eyeing a stock market listing when Brait swooped, with chief executive Anders Kristiansen saying in February that the retailer was ready for floatation.
However, Nick Bubb, an independent retail analyst in London, said an IPO may not have made sense for New Look, which has ambitions to grow in China, the world's most populous country.
"An IPO never looked a runner given New Look's very chequered UK history and the unproven Chinese potential," Bubb said.
"Whether New Look's recent revival can be sustained is another matter, given the surplus capacity in the UK fast fashion market."
New Look, which also operates in France, Poland and Belgium, pulled a planned stock market listing in 2010 amid turbulent financial markets.
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