Super-Rich Family Plots BHS Rescue Deal

A wealthy overseas investor is in secret talks about a rescue of the ailing high street retailer BHS that would salvage thousands of British jobs.

Sky News has learnt that a new vehicle has been established by the mystery bidder in the hope that a multimillion-pound takeover of the chain can be sealed in the next 48 hours.

The source of the interest could not be definitively confirmed on Monday afternoon, although one source suggested it could be an entity affiliated to Isabel dos Santos (Dusseldorf: STS1.DU - news) , the daughter of Angola's president, which has interests in the Portuguese banking and energy sectors.

To add to the confusion surrounding BHS's future, another City insider suggested that a namesake - but unrelated - dos Santos family in Portugal, which has interests in food distribution and retailing in Portugal, Poland and Colombia, could be the mystery party.

Administrators at Duff & Phelps are continuing to work with several potential buyers of BHS and are optimistic that a deal can be struck to acquire the entire business, which trades from roughly 160 stores across the UK.

City sources believe that a deal could be announced in the next two days.

The other bidders are reported to be John Hargreaves, the founder of Matalan, who is working with Select Fashions, a supplier to parts of the British high street; and Crown Crest, the parent company of Poundstretcher.

A spokesman for Duff & Phelps declined to comment.

BHS, which was sold by Sir Philip Green to a little-known consortium for £1 last year, employs approximately 11,000 people, and is carrying a large pension deficit which is likely to transfer to a lifeboat vehicle funded by other major employers.

News (Other OTC: NWSAL - news) of the dos Santos bid for BHS comes hours ahead of a marathon parliamentary hearing during which a dozen witnesses will give evidence on the chain's sale to Retail Acquisitions Limited.

Sky News disclosed on Sunday that MPs would attempt to scrutinise Sir Philip's long-standing relationship with Goldman Sachs (NYSE: GS-PB - news) during the hearing.

Goldman provided informal advice to Sir Philip's holding company, Taveta Investments, about the proposal to acquire BHS but was not incentivised to recommend that the deal went ahead - unlike the advisers to Retail Acquisitions Ltd (RAL), the vehicle which bought the chain.

BHS's future was plunged into doubt last month when administrators were called in after RAL failed to secure new financing needed to keep the chain trading.

Frank Field, the Labour MP who chairs the Work and Pensions Committee, said he wanted to understand why Goldman had agreed not to be remunerated for the advice it gave Sir Philip on BHS.

"I want to know why this was the case. Banks do not make big profits by acting as charities," he told Sky News.

It (Other OTC: ITGL - news) is common practice for investment banks and other City firms to undertake work on projects for long-standing clients without payment, often in the expectation that future work will be directed towards them.

In the case of BHS, Goldman's work is said to have involved fewer than a handful of meetings between its bankers and RAL's frontman, Dominic Chappell, whose involvement in a series of failed ventures will also come under the microscope during the MPS' inquiry.

Goldman is not understood to have provided a formal recommendation for Sir Philip to sell BHS to RAL.

The Wall Street giant has counted Sir Philip and his Arcadia business as clients for well over a decade, having acted for him on his ill-fated attempt to buy Marks & Spencer (Other OTC: MAKSF - news) in 2004.

Lord Grabiner, the chairman of Taveta Investments, is also a non-executive board member of Goldman Sachs International, its main London-based subsidiary.

In a statement published on Friday, Lord Grabiner said he had not been involved with any negotiations related to the sale of BHS and that he had not heard Mr Chappell’s name prior to the deal's conclusion.

Among the witnesses giving evidence at Monday afternoon's joint session with the Business, Innovation and Skills Select Committee will be Lord Grabiner and Anthony Gutman, a senior UK-based Goldman executive who joined the firm in 2007.

The session will also hear from advisers on the BHS pension scheme which is now hundreds of millions of pounds in deficit, and a number of Arcadia directors (Other OTC: UBGXF - news) .