7th Apr 2014 06:21
LONDON (Alliance News) - Mike Ashley, the founder and deputy chairman of Sports Direct International PLC has bought an 11% stake in House of Fraser, injecting himself into the agreed takeover of the British high street retail chain by Chinese conglomerate Sanpower Group Co Ltd, The Telegraph wrote on Sunday.
The 165-year old department store chain recently finalised a takeover deal with Sanpower, giving House of Fraser an enterprise valuation of GBP450 million. The Nanjing-based conglomerate led by founder Yuan Yafei holds an 89% stake.
Ashley bought an 11% stake in House of Fraser from Scottish business man Sir Tom Hunter, according to The Telegraph.
House of Fraser is said to be threatening legal action against Hunter and Ashley following the agreement, as it claims that pre-emption rights attached to the stake mean Hunter should have offered the shares first to the company?s other investors, according to the newspaper article.
Before the deal with Sanpower, the House of Fraser board had been looking at various ways to raise new funds, including either a flotation or takeover talks.
The retailer had previously been in talks with upmarket French department store chain Galeries Lafayette, although talks came to an end in January, after the French retailer was facing internal problems with its board.
Sanpower has sales of more than GBP5 billion and controls more than 100 firms, including the Chinese department store Nanjing Xinjinkou.
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10748618/Mike-Ashley-faces-legal-row-over-House-of-Fraser-stake.html
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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