Welspun, GHCL may be eyeing Linens ’n Things

The market was rife with speculation on Wednesday that textile majors Welspun India Ltd and Gujarat Heavy Chemicals Ltd (GHCL) were in the race to buy US-based Linens ’n Things for $1.1 billion.But the two companies denied any plan to acquire the New Jersey-based home textiles and houseware retailer.

Linens ’n Things, which operates over 570 stores in the US and in six provinces in Canada, had filed for bankruptcy late last month and was planning to close down 120 stores.The company had posted losses of $242 million in 2007 on sales of $2.79 billion. This prompted speculation that it was up for grabs.On the other hand, both Welspun and GHCL have a history of foreign acquisitions.

Welspun sewing another European buy

Some 16 months after its first European buy, Welspun India is close to acquiring another home furnishings and textile firm in the continent as it tries to reduce dependence on the US market and combat the rupee’s appreciation against the dollar.

The company is likely to announce the deal, which is estimated to be in the range of Rs 80-100 crore, by the end of this month. The name of the company it buying and other details were not disclosed.However, Akhil Jindal, president, Welspun India, denied any such plans. Welspun acquired Christy, the UK’s largest terry towel brand, in July 2006.

The flagship company of Rs 2,500 crore Welspun Group exports products mainly to the US; 70% of its revenues comes from exports of which Europe contributes only 5%.Welspun is among the top four terry towel manufacturers in the world and accounts for 30% of the country’s terry towel exports to the US and 8% of the US imports of terry towel.

It is a vertically integrated company with activities starting from cotton farming to branding and retailing. It is one of the largest exporters of terry towels in Asia, exporting products to global companies like Costco, Wal-Mart, Kohls, Target, Springs, Nautica and Umbra.

Read more in The DNA Money article.