Phones4U's US owners call off sale

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Phones4U tycoon John Caudwell will miss out on a further cash windfall after a sale plan was dropped

Phones4U tycoon John Caudwell will miss out on a further cash windfall after the mobile phone retailer’s US owners ditched plans to sell the company.

Private equity firm Providence, which bought 75% of the company four years ago from Mr Caudwell, had been looking to sell the company after a number of takeover approaches.

But the Rhode Island-based owners have scrapped plans to sell the mobile phone retailer, which is thought to be worth in the region of £700 million to £800 million.

Billionaire Mr Caudwell, who still owns a stake in the business, would have had a second pay day had any deal gone ahead.

The group began in 1987 when Mr Caudwell bought 26 phones from the US for more than £1,000 each and sold them on in the UK.

Providence bought the firm in 2006 for £1.46 billion, although the deal also included Mr Caudwell’s 20:20 phone distribution arm. Phones4U has 476 stores. It is thought some of the interest may have come from mobile phone operators, as owning shops can help them to encourage consumers to switch provider.

In a statement, a Providence spokesman said Phones4U is performing strongly and expects to generate underlying earnings of £130 million in 2010, up 23% on the previous year, although it holds debts of £300 million.

He said: “Following the receipt of a number of unsolicited expressions of interest for Phones4U, Providence conducted a process to explore strategic options for the company. After concluding this process, Providence has determined it can realise the most value through its continued ownership of Phones4U.”

He said the strong balance sheet allowed Providence to consider several options for Phones4U, including among others accelerating growth.

He went on: “Providence remains excited by the many strengths and prospects of the business and looks forward to its continued partnership with the management team to capture those opportunities.”

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