DFS offer could be too little, too late

SOFA king Lord Kirkham upped his offer for furniture group DFS by £11m to £507m - but it's likely to be rejected as too little, too late by key investors who could derail his bid.

Kirkham tabled the improved deal less than a week before a crunch shareholder meeting which was likely to veto the deal.

He is now prepared to pay 455p a share for DFS - 10p more than his most recent offer - and insists that the bid is 'full and final'.

'This is as much as I can afford and it is up to shareholders to decide whether they accept it or not,' chairman Kirkham said.

Investors who were polled declared themselves 'underwhelmed' by the improved terms, which they reckon seriously undervalue the Doncaster firm.

They said the terms did not recognise the recovery prospects of DFS as competitive pressures ease. 'For us, nothing has really changed [with this bid],' one institution said.

Investors are anxious to keep Kirkham - who founded the company - on board if this latest deal fails. And they are keen for the independent directors to back away from a veiled threat to quit if the deal is rejected.

'We would urge an orderly change to the board structure carried out over a period of time,' another fund manager said.

Last month, Morley Fund Management, holder of a 6.3% stake in DFS, and M&G, which has 7.6%, said they would vote against the original offer.

Kirkham, with 10% of the company, needs 75% of remaining shareholders to vote in favour for the offer to succeed.