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‘House of Fraser combination with Debenhams could be on the cards’
Posted on Thursday, 13 September 2018 10:55
UK department store giants House of Fraser and Debenhams could be merged together, according to Reuters.
The news provider cited Simon Bentley, an outgoing non-executive director at Sports Direct, which owns stakes in both businesses, as saying a combination has been discussed at board level.
No further details of the potential deal have been disclosed at this time.
Sports Direct has only owned House of Fraser for a few weeks; the retailer picked up the department store operator’s business and assets for GBP 90.00 million in cash on 10th August.
An agreement was previously in place with Chinese fashion conglomerate C.banner which would have seen the firm acquire a 51.0 per cent stake in the retailer.
In line with that transaction, House of Fraser announced its intention to launch a company voluntary arrangement back in May. It intended to close a number of stores and renegotiate rents on other locations.
However, the deal with C.banner ultimately did not come to pass after the prospective acquiror decided against investing in the business.
House of Fraser now intends to close 31 of its 59 stores in January.
Following initial reports on the comments by Bentley, he appeared to backtrack somewhat, saying he had not intended his words to indicate a potential merger between Debenhams and House of Fraser.
He clarified his position by stating that Sports Direct will simply be in a good position to capitalise on any future opportunities which may arise.
Zephyr, the M&A database published by Bureau van Dijk, there have been 94 deals worth a combined USD 5.96 billion targeting department store operators announced worldwide during 2018.
The most valuable of these was worth USD 2.03 billion and involved Signa Holding buying Galeria Kaufhof’s property and operating companies from the Hudson’s Bay Company.
© Zephus Ltd