Electricals group Kesa expects to complete the €550 million (£409 million) sale of French furniture chain BUT next month and will return cash to investors via a share buy-back programme.

Kesa disclosed today that a sale and purchase agreement had been exchanged with an acquisition consortium comprising Colony Capital, Goldman Sachs and Merchant Equity Partners.

The retailer said: “Following the receipt of proceeds from the disposal, [the board] will put in place an on-market share repurchase programme to return a proportion of net proceeds.”

Kesa did not disclose the timing or value of the buy-back scheme, but said it would be dependent upon “the company’s share price, balance sheet and cashflow, and any opportunities which might arise to make bolt-on acquisitions on attractive terms.”

Pali International analyst Nick Bubb said a 10 per cent share buy-back would cost£120 million and enhance earnings per share by 7 to 8 per cent.

The acquisition consortium’s interest in BUT was first revealed by Retail Week (October 27, 2007).

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