Carpetright CEO Makes Offer for Remaining Shares

London, England, October 9, 2007--Carpetright Chairman Philip Harris offered to buy the rest of Carpetright, the U.K.'s largest carpet retailer, for 630 million pounds ($1.3 billion) after the stock declined and sales fell.

Harris and senior managers offered 1,250 pence per share in cash, or 7.7% more than yesterday's price, the Rainham, England-based company said today. The executives already own a combined 26% stake.

Carpetright today said U.K. and Irish demand remains ``uncertain,'' with sales at stores open at least a year in those markets sliding 0.8%  in the 23 weeks to Oct. 6. In June, the retailer authorized Harris to look into taking the company private as higher British interest rates weighed on consumer spending.

The bid is ``some way below the level we had expected,'' Seymour Pierce analyst Andrew Wade said in an e-mailed note. Wade, who has a ``hold'' rating on the stock, had expected an offer of around 1,300 to 1,350 pence a share.

Carpetright shares rose as much as 66 pence, or 5.7%, to 1227 pence as of 8.11 a.m. in London. A close at that level would represent the biggest daily percentage gain since Aug. 8. The stock is still down 7.5% for the year.

The bid, which values the company at 849 million pounds, is subject to approval from independent directors, the company said. The management team is also offering investors untraded stock in lieu of cash.

The company was founded in 1988 by Harris, who is also chief executive officer, and now has 546 U.K. and Irish stores after buying Storeys Carpets in May. Harris owns 23.4% of Carpetright.

``We will continue to cut costs where possible, relocate to smaller stores where appropriate and focus on cash generation,'' Harris said in the statement.

Carpetright has added to sales with expansion into the Netherlands and Poland as rising interest rates threaten to crimp spending in the U.K. It now has 112 stores in the rest of Europe.

The retailer said total sales rose 10% in the 23- week period, its first half. Carpetright's fiscal year ends May 3.