Panasonic And CVC Style £400m Bids For GHD

Another of Japan's corporate giants is styling a takeover bid for a British rival with an offer from Panasonic (Swiss: MAELI.SW - news) to buy GHD, the hair products manufacturer.

Sky News understands that Panasonic has emerged as a serious contender to acquire GHD, which supplies products to celebrities including Victoria Beckham and the singer Katy Perry.

CVC Capital Partners, the private equity group, has also lodged an offer for GHD, which is thought to be valued by its owner, Lion Capital, at more than £400m.

The interest from Panasonic, which has an existing haircare business, has emerged a fortnight after Japan's Softbank struck a £24.3bn deal to buy the UK chip designer ARM Holdings (LSE: ARM.L - news) .

Overseas acquirers have used the post-referendum fall in the value of sterling as an opportunity to mount takeover offers for British companies.

A US-based investment firm and another industry bidder are also understood to be participating in the auction of GHD, whose name stands for Good Hair Day.

Documents sent to prospective buyers outlined the rapid growth of the company, which made £33.7m in pre-tax profit in its 2015-16 financial year.

Sources previously told Sky News that the company was likely to be valued at roughly 13 times its earnings, meaning that a price-tag of about £400m is being targeted by Lion (Other OTC: LIOPF - news) .

Sales grew by 9.5% last year to £181.2m.

GHD manufactures a wide range of straighteners, curling products and hairdryers, and is understood to be pitching a strong innovation pipeline, developed with the aid of new technologies, to prospective buyers.

It was founded in 2001 with a £15,000 investment from three entrepreneurs in Bradford, West Yorkshire, who bought the rights to a Korean-developed hair-straightening iron.

The company now has an alliance with Mrs Beckham's fashion business, and leans heavily on a range of celebrity endorsements to promote itself.

GHD's slate of new products includes 'Project Nala', the relaunch of a styling product called Gold; and a new "disruptive curling product" labelled 'Project Goldilocks', which the company regards as "a dramatic breakthrough because [the] category has high consumer dissatisfaction", according to an insider who has seen the initial sale documents.

Lion, which specialises in improving the performance of consumer products businesses and is the current owner of brands such as All Saints, the fashion retailer, has owned GHD since 2013.

In the UK, GHD products are sold in upmarket outlets such as Harvey Nichols and Selfridges, with the company keen to expand its international reach by growing sales in countries such as Brazil, China, India and South Korea.

The sale documents also claim that GHD has a higher net promoter score - the advocacy of its customers - than brands such as Apple (NasdaqGS: AAPL - news) , they added.

GHD has been run since 2014 by Anthony Davey, a former Procter & Gamble executive.

The company's rival, Tangle Teezer, is also exploring a sale and is in talks with a number of private equity firms, which analysts say reflects a growing demand for grooming products.

Lion Capital declined to comment on Monday.