THE pensions watchdog is to investigate the Silentnight takeover because of the way a £100million pension black hole was offloaded.

The probe will focus on the deal secured by US private equity group HIG Capital that rescued the bed firm from collapse earlier this month, safeguarding 650 Barnoldswick jobs.

HIG’s swoop cut loose a final salary pension fund with a £100million deficit following a controversial ‘pre-pack’ administration.

And that move has concerned the Pensions Regulator and the Pension Protection Fund (PPF), the state lifeboat for funds of failed companies.

Although most of the funds from the scheme’s 1,500 pensioners are insured by the state, the regulator and PPF are concerned at the deal.

Questions have also been raised by Pendle MP Andrew Stephenson.

He said: “While the situation at Silentnight may have been very genuine, I feel the actions of HIG, a US private equity business, should be investigated.”

HIG became Silentnight’s main creditor earlier this year after its Bayside Capital arm bought the company’s debt from a bank.

That move meant it could force the firm, which was struggling with pensions liabilities, into administration.

The pension fund was offered 6p in the pound and 10 per cent equity in Silentnight in a bid to avoid administration but the deal was rejected.

Silentnight’s subsequent collapse means the pension scheme is set to be offloaded to the PPF.

Defending the deal, HIG’s Mark Kelly said: “The company tried to balance the needs of all the stakeholders while securing its long-term future.”