Chinese on brink of House of Fraser bid
HOUSE of Fraser is on the verge of a takeover by a Chinese conglomerate, in a landmark deal valuing the retailer at £450m.
Chinese powerhouse Sanpower Group, led by 49-year-old multi-millionaire Yuan Yafei, has tabled an all-cash offer to buy out the 165-year-old British department store’s diverse patchwork of shareholders and its £160m of debts.
An agreement is expected within the next week, although the terms are still to be finalised and there is no certainty of a deal.
House of Fraser chairman Don McCarthy, who owns 20 per cent of the company, has recommended the offer to other key shareholders, including retail investor Sir Tom Hunter, All Saints founder Kevin Stanford and a clutch of Icelandic lenders. The purchase will mark the end of long-running search by the company’s shareholders to exit the business, which left the stock market in 2006 when failed Icelandic investment firm Baugur bought the group.
The high street chain, which has its flagship store on Oxford Street, has been running a so-called dual track process to sell the firm, either through a stock market flotation in London or a trade sale.
The company, which was being advised by Rothschild, had also appointed Numis and HSBC to explore the scope for a return to market. It had also been in talks with French store Galeries Lafayette about a takeover but the negotiations failed after a management shake-up at the French group in January derailed discussions.
The Chinese company, which employs 30,000 people, is understood to have approached House of Fraser directly to enquire about a purchase, after the two sides previously explored plans for a franchise of the brand in China. All parties declined to comment.
The deal underlines the healthy Chinese interest in distinctive British brands, adding to a growing list of acquisitions that include the takeover of black cab maker The London Taxi Company by Geely Automotive last year and the 2012 sale of Weetabix to China’s Bright Food.