We think Dixons offers the best combination of low valuation improving fundamentals

“We think Dixons offers the best combination of low valuation, improving fundamentals and leverage buyout appeal,” the broker concluded after trawling the retail sector for value.Upgrading its rating on Dixons from “neutral” to “buy”, UBS argued that if a £9bn leveraged buyout bid (LBO) is possible for Marks & Spencer, it is certainly a possibility for Dixons, which at the close of business was valued at about £3bn. UBS believes Dixons could be acquired for as little as £1.7bn of hard cash, with the rest of the capital raised via debt. These are key to any private equity buyer as it will almost certainly borrow the bulk of the money required for the acquisition. The excitement surrounding Dixons was caused by an investment note from UBS.

Hopes that Dixons will be the next blue-chip retailer to find itself on the receiving end of a takeover bid sent shares in the electricals group 5p higher to 161p yesterday. It’s hard to see how the commercially driven offer put forward by a 3i-led consortium can beat them. The Barclays will no doubt hugely enjoy their new toy, but they’ll struggle to make it yield a decent return. Still in his early 30s, Viscount Rothermere is determined not to go down in history as the man who squandered the family fortune.I’ve long thought the Barclay brothers the most likely to win.

They desperately want the titles and they’ve got pockets deep enough to indulge their desires. As a minority investor, he could limit his downside while keeping his options open for the future. But as the auction soared towards £700m, the heat became too much for both of them. If even the trade buyers, with all the synergies they are capable of generating, cannot see value at the price The Daily Telegraph has been bid up to, you have to wonder how the remaining two bidders plan to make their return.Having decided some while back that the Telegraph had become too expensive to go it alone, Lord Rothermere instead threw his lot in with one of the private equity bidders. Daily Mail & General Trust may be a FTSE 100 company, but it is also still family controlled That makes in naturally cautious. They said it added to evidence from the housing and labour markets that the economy – and the consumer sector in particular – was firing on all cylinders.But they said the Bank’s Monetary Policy Committee may want to wait to see if its previous 1 percentage point increase and this week’s warning on house prices by its Governor, Mervyn King, were having an effect.John Butler at HSBC said: “If one of the Bank’s goals is to cool the consumer, then the first half-point of hikes failed to make a mark. The competition issues were certainly daunting, but it was hard to see how regulators could disallow a takeover that would still leave the Mail group trailing Rupert Murdoch’s News International.