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OFT to examine American Greetings’ buy-out

Watchdog checks if deal is ‘lessening of competition’

THE Office of Fair Trading is to investigate American Greetings acquisition of Clinton Cards.

The watchdog will examine the US firm’s subsidiary Lakeshore Lending’s £23million deal for 397 of the UK company’s stores after it went into administration because AG bought its £35million debt from the banks and called it in.
The OFT, which can look at any merger up to four months after its completion, will look at whether the deal will result in a “substantial lessening of competition”, and if it qualifies as a “relevant merger situation” under the Enterprise Act 2002.
Administrator Zolfo Cooper has said Lakeshore beat 11 rival bidders to buy the stores and save around 4,500 jobs after 43 initial expressions of interest. Nearly 30 confidentiality agreements were signed.
Zolfo Cooper, which was appointed administrator to Clinton Cards and its subsidiaries on May 9 after the AG move, said that there were no offers for the whole business.
The administrators were dealing with the 330 stores not bought by AG. Despite negotiations on rent-free deals with landlords and efforts to find other buyers, there have been five announcements of closures and the loss of almost 3,500 jobs, since then, leaving Zolfo Cooper with just 76 shops and 550 staff.
On Thursday Zolfo Cooper announced these last stores would all close by the end of July.

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