Claims clash hampers Fayrewood buy-out

The proposed Fayrewood buy-out has stalled over the £2m set aside by the firm as cover for ISI's buyer

Distribution group Fayrewood’s proposed buy-out has hit a potential stumbling block after it admitted a clash with the buyer of its ISI arm may force it to amend the structure of the deal.

London-listed Fayrewood sold UK IBM and Lenovo distributor ISI – its last remaining operating subsidiary – to IT group SCH last August.

Fayrewood’s non-executive chairman, David Kleeman, then established Letchworth Investments to buy the group as a mechanism to return value to shareholders.

But ISI’s buyer has asserted that the £2m Fayrewood has set aside in its sale agreement to cover it as a creditor is inadequate.

Although Fayrewood believes the purchaser’s claims are over inflated, it said in a statement yesterday that the Court is unlikely to approve its takeover unless the scheme of arrangement under which it is to be carried out is amended.

“The independent directors will make a further announcement in relation to the Claims as soon as practicable and suggest that Fayrewood shareholders await further details on the status of the Claims before deciding whether to accept the Cash Offer or elect for the Part Share Alternative,” the firm added in a stock exchange announcement.

Fayrewood decided to quit the IT distribution game two years ago, with pan-European distributor Computerlinks, French outfit Banque Magnetique and Spanish broadliner UMD among its other former interests.