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Rebellion of the dispossessed

Private-equity houses are trawling Europe for cheap listed companies. Critics say shareholders shouldn't sell out so cheaply but should rather seek enhanced value for themselves. Some are already rebelling against the loss of future value.

SOME OF THE biggest names on the UK high street, such as PizzaExpress, Holmes Place, Selfridges and Allders, have succumbed to public-to-private (PTP) bids this year. In the first weeks of last month alone, Macdonalds Hotels in Scotland received a Bank of Scotland-backed management buyout offer and Iceland-based retail group Baugur snapped up London toy store Hamleys.

In continental Europe, Hg Capital has secured German car parts maker WET Automotive and Advent International is in the process of taking Romanian pharmaceuticals firm Terapia private in one of eastern Europe's first PTP transactions. Paribas Affaires Industrielles is trying to secure French optician Grandvision and the high-profile bidding war for UK retail group Debenhams is still being waged.

The rash of high-profile PTP bids is in large part a result of the unprecedented liquidity of private-equity funds, which have a wall of cash they are under pressure to invest. European Venture Capital Association figures estimate that a total e45 billion was available for investment in European buyouts at the end of 2002.

And while private-equity houses have cash to spend, public companies are still comparatively affordable.

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