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CHS bigwig launches European MBO bid

Update: But receivers still want to sell CHS UK as going concern

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CHS Electronics today saw an MBO bid launched to buy 51 per cent of the EMEA business. The new EMEA operation would be led by Mark Keough, currently chief operating officer for CHS Electronics worldwide. Keough said he had the backing of manufacturers who "unanimously view this as a positive move". The CHS board is due to discuss the offer in the US today. Meanwhile, CHS Electronics has put subsidiary Metrologie UK up for sale to try and salvage its UK sales arm. The distributor announced Friday that CHS Electronics Plc, a subsidiary of CHS Electronics Holdings in the UK, had been placed in receivership by creditor Deutsche Financial Services (DFS). Today it revealed it was in talks to sell Metrologie UK and parent company CHS Electronics Holdings to raise cash to remove the subsidiary from receivership. DFS is calling in a £17 million debt on CHS. This comprises of a loan of £12 million owed by CHS Electronics Plc, and a further £5 million from a loan to CHS Germany guaranteed by the UK PLC. According to a statement by Peter Rigby, CHS' marketing director, both loans are secured by receivables of £20 million. Debts to other creditors were not disclosed. Rigby said the move from DFS was "unexpected and unannounced", but that the sale of the two UK operations was expected to be finalised within the next 48 hours. He maintained that Karma UK was a separate business, so it was not for sale and would remain unaffected by the action. Both Metrologie UK and Karma UK were open for business this morning. CHS Electronics Plc has 260 staff, with around 160 of these based in Brentford, and the remainder in Woking. Staff were this morning looking for alternate jobs within the industry, sources said. Metrologie has around 160 staff in the UK. Rigby, who said his own position remained undecided due to these recent events, commented: "It is quite likely, and I am hopeful, that a buyer will be interested in keeping the staff." Receivers BDO Stoy Hayward said it was still seeking to sell the business as an ongoing concern, in a company statement. Simon Michaels, a partner at BDO Stoy Hayward, said: "CHS Electronics are a significant player in this market and can offer a substantial client base to a potential buyer." A BDO Stoy Hayward representative was unable to confirm names of bidders, but said there had been a number of potential buyers over the weekend. She confirmed that an announcement was expected later today. ®

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