AS Watson offers $400m for Perfume Shop

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The Nuance Group's partner in Hong Kong and Singapore seeks to bolster its dominant position on the UK domestic market

Global health and beauty retailer AS Watson, The Nuance Group's partner in Hong Kong and Singapore, has submitted a £220m ($400.4m) offer for Merchant Retail, owner of UK domestic fragrance retailer Perfume Shop.

Merchant Retail's board of directors is recommending the cash offer, and shareholders have until 3pm on June 22 to accept the offer. Merchant Retail chairman Brian O'Callaghan said: "Merchant Retail has performed well in recent years. However, with the likelihood of an increasingly competitive market in the UK and a challenging retail spending environment, developing the group further is most likely to succeed if undertaken by a larger international corporation."

Perfume Shop operates from 114 high street outlets in the UK. Merchant Retail also owns Jersey-based department store business De Gruchy.

AS Watson already owns Superdrug, one of the UK health and beauty retail market leaders, and Savers, a discount retail outlet. Between them Superdrug and Savers have more than 1,100 outlets in the UK. In April this year Watson acquired Marionnaud, Europe's largest fragrances and cosmetics retailer with 1,226 shops in 14 countries, including a 30% share of the French fragrance market. In total, Watson operates 6,200 stores in 31 markets.