Gateway Corp. PLC, Britain's third-largest supermarket chain, said today it accepted a $3.1-billion friendly takeover bid put together by a U.S. investment bank, marking the largest leveraged buyout deal ever in Europe.
A partnership including the New York-based Wasserstein Perella & Co. and the retailer Great Atlantic & Pacific Tea Co. outbid Isosceles PLC, a recently formed British investor group that still has a chance to improve its offer.
The deal demonstrates the growing importance of foreign investors here and an increased acceptance of high-debt deals that take companies private, which are already common in the United States. In the leveraged buyouts a company's public stock is bought with borrowed funds, and the target company's assets used as collateral.
"There is a slowly changing environment for these kinds of deals," said analyst Linda Harte, an analyst with the the stockbroker Hoare Govett.
The bid was made through Newgateway, a company set up by Wasserstein Perella and West German-controlled U.S. food-retailing giant A & P.
Gateway's board unanimously recommended the Newgateway offer.