Saudi Arabia's PIF makes bid to increase stake in Selfridges

The Saudi wealth fund has made a cash offer that would boost its share in the upmarket UK retailer to 50 per cent, according to Bloomberg

A pedestrian carrying a Selfridges bag crosses the street in London. According to Bloomberg, Austrian insolvency documents show Saudi Arabia's PIF has made a bid to increase its stake in Selfridges to 50 per cent. Photo by Hollie Adams / Getty ImagesShow less

Saudi Arabia's Public Investment Fund (PIF) has made an offer that would significantly increase its stake in luxury UK retailer Selfridges, according to a document Bloomberg News claims to have seen.

PIF already owns a 10 per cent share in the Selfridges properties, while 40 per cent is owned by the troubled real estate and retail empire, Signa and the remaining 50 per cent is owned by the Thai retail conglomerate Central Group.

Selfridges was bought by Signa and Central in 2021 for £4 billon, with the business split between an operating company and a property company.

Central moved to take control of the operating company when Signa began to run into financial difficulties last year, by converting a £317 million loan into a majority stake in Selfridges.

According to an insolvency report seen by Bloomberg and filed by Signa's property group, PIF has made a cash price offer of £1 million ($1.3 million) for the 40 per cent stake.

The properties include sites in London’s Oxford Street and Manchester, and the report said the Saudi wealth fund was carrying out due diligence.

Selfridges department store on Oxford Street in London. Selfridges has department stores in Manchester and London.

The potential Signa deal comes as the sprawling group of companies founded by the Austrian tycoon, Rene Benko, unwinds after its key property units collapsed into bankruptcy at the end of last year.

PIF is also a creditor to Signa and if the Selfridges deal were to go through, the Saudi fund would reduce its claims against Signa by about £52 million, according to the document.

Sale at Selfridges

Ever since Signa passed into stormy financial waters and navigated towards insolvency there have been several rumours regrading possible future stakeholders in Selfridges.

The Qatar Investment Authority was thought to be interested, as Selfridges could make an interesting stable mate to Harrods, the London luxury department store it already owns.

Likewise, Gucci-owner Kering was also thought to be in a real estate-acquisitive mood, following the $963 million deal it reached in January to buy the 115,000 square foot Fifth Avenue building that's home to its New York Gucci store.

A prime piece real estate in London's West End, Selfridges was founded in 1908 by American Harry Gordon Selfridge, and has for more than a century been at the heart of luxury retailing in London.

PIF has several investments in the UK, including in Aston Martin and Newcastle United football club.