Bloomberg News

Dunelm Declines After Son of Founders Sells Shares: London Mover

March 05, 2012

Dunelm Group Plc (DNLM), a U.K. retailer of budget home-furnishings, fell the most in three months after the son of the founding couple sold 3.7 percent of the shares to diversify his investments.

Will Adderley and his wife, Nadine, sold stock at 480 pence, or 5.6 percent below the closing price March 2. He retains 31.2 percent of Dunelm’s issued share capital, and the family as a whole controls 54.9 percent after the sale, the Leicester-based company said today in a statement.

Dunelm plunged as much as 6.2 percent to 477 pence and was down 4.6 percent at 484.90 pence at 12:52 p.m. The company said earlier this morning that the couple planned to sell shares representing 2.5 percent of the capital, and revised that to 3.7 percent later in the day. The sale was managed by UBS, with Oriel Securities as co-lead manager.

The decline represents a buying opportunity, Jean Roche, a retail analyst at Panmure Gordon, said today in a note to investors after the initial Dunelm statement. She reiterated a prediction that the bedding and towel retailer’s stock will rise to 600 pence.

Dunelm has plenty of cash and should “surprise on the upside” from fiscal year 2013 onwards because of “competititor weakness,” Roche said last month. Dunelm has gained 21 percent in the past 12 months.

Adderley, who took over running the company in 1996, stepped down as chief executive officer last year and is now executive deputy chairman. The company operates Dunelm Mill stores across in the U.K. and had 538.5 million pounds ($852 million) in revenue in the year ended July 2, 2011.

Will and Nadine Adderley have agreed not to dispose of more shares for at least six months, the company said. The former CEO “remains fully committed to Dunelm in his role as executive deputy chairman as well as remaining a very substantial shareholder,” Dunelm said.

To contact the reporter on this story: David Risser at drisser@bloomberg.net

To contact the editor responsible for this story: Mark Gilbert at magilbert@bloomberg.net


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