OFT to examine American Greetings' Clintons deal

The watchdog will examine the US firm’s Dewsbury subsidiary Lakeshore Lending’s £23m deal for 397 stores which saved 4,500 jobs.

The OFT will look at whether the deal will result in a “substantial lessening of competition”. The OFT is able to look at any merger before the closure of a deal or up to four months after its completion.

The inquiry will examine if the deal qualifies as a “relevant merger situation” under the Enterprise Act 2002.

The deal includes the brands and assets of Clinton Cards which generate around £212m in annual revenues.

Administrator Zolfo Cooper said that Lakeshore beat 11 rival bidders to attain the stores after 43 initial expressions of interest. Nearly 30 confidentiality agreements were signed.

Zolfo Cooper, which was appointed administrator to Clinton Cards and its subsidiaries on May 9, said that there were no offers for the whole business.

American Greetings – Clinton Cards’ largest creditor owed £35m – swooped for the retailer in June.

Rona Bar-Isaac, competition Law Expert at Addleshaw Goddard said: “The OFT’s interest in the deal may be to scrutinise the combination of a significant greeting cards supplier with Clintons’ substantial retailing operation.  

“Due to American Greetings supplying a number of high street outlets, it is likely that the OFT have had complaints from retail customers concerned about being discriminated against following its move into retail.” 

She added: “As a major creditor of Clintons, American Greetings is an obvious choice to buy their assets. However, If the OFT considers there to be any significant competition concerns, one of the major considerations will be whether there are any other credible buyers for the ailing chain which would not raise similar competition concerns.”