Boardroom split rocks Kingfisher

By TEENA LYONS
Updated:

 

KINGFISHER chairman Sir John Banham is to quit after a boardroom bust-up over the retail conglomerate's attempts to split itself in two. Banham has become increasingly frustrated by the refusal of chief executive Sir Geoff Mulcahy to accept offers for its Woolworths and Superdrug chains, say company insiders.

Banham has been urging Mulcahy to make a decision on Kingfisher's future - either agree to sales of individual businesses or demerge the group into two separate quoted companies.

Kingfisher said last September that it would split into two companies. One would embrace its DIY and electricals businesses, which include B&Q and Comet, the other 'general merchandise' operations such as Woolworths, Superdrug and Big W. But Kingfisher has since received offers from buyers interested in taking over Superdrug and Woolworths as separate ventures.

Mulcahy held lengthy negotiations to sell Superdrug to Dutch health and beauty chain Kruidvat and had talks on Woolworths with venture capitalists Charterhouse and Schroders. Banham was keen, since the sell-offs would have trimmed Kingfisher's debts. But talks broke down because Mulcahy was determined not to let the chains go too cheaply.

At a board meeting on Friday, Mulcahy won the support of the board to let the demerger go forward, possibly a month later than the original self-imposed deadline of the end of next month.

Woolworths chairman Gerald Corbett, recruited from Railtrack, is pressing investors to back the creation of the general merchandise division. There will be a shake-up of the Super-drug and Woolworths chains with the loss of jobs at their head offices.

Banham, chairman since 1995, had been expected to chair New Kingfisher, the electricals and DIY arm. But after falling out with Mulcahy, he plans to announce his resignation at the annual meeting on May 23. Ironically, Mulcahy is believed to have initially opposed the demerger, but was persuaded by Banham to adopt the strategy last September.

Banham, 60, a former director-general of the CBI, is also chairman at Whitbread.

Most watched Money videos