Bargain hunting

In recent times, quoted companies have presented a real headache to acquire and have accounted for a tiny proportion of dealflow - there were seven take-privates in 2006 and there have been 12 in 2007. If the public markets' focus on share price continues to undervalue retailers, we could see a number of deals in this area. Activity in the retail sector of late has been concentrated in high-end, differentiated brands: 3i's acquisition of Agent Provocateur; Phoenix Private Equity's investment in Abel & Cole and Exponent Private Equity's buyout of Radley handbags. Private equity's appetite for retail businesses will remain discerning, but with the weight of cash stacked behind it, it can't afford to dismiss potential stock market bargains.