Hold fire on the Home Retail takeover speculation.
It seems that despite Tuesday's filing to the London stock exchange, a 4.25% stake in the Argos and Homebase group was built up by US group Tradewinds Global Investors and not Madison Dearborn Capital Partners. Apparently a complicated chain of command means one of the investors in Tradewinds' parent fund is Madison, but the decision to invest in Home Retail was taken by Tradewinds itself.
The significance is that part of Madison's strategy is to invest in management buyouts, hence the jump in Home Retail's share price on Tuesday as investors gambled that some corporate action could be on the agenda.
Tradewinds on the other hand is a mutual fund which does not pursue such deals. So while the letter of the stock exchange filing was correct, the implication that Madison made the investment decision - and could be involved in a buyout - was not.
Still, Home Retail's shares are up another 4.3p at 212.4p, with traders saying the better than expected figures from Marks and Spencer had lifted the whole sector. However it is a little difficult to see much cross over between M&S's food and fashion offerings, and the market served by Argos and Homebase.
