House of Fraser’s new owner Sports Direct has been forced to issue a statement denying reports it intends to make a takeover offer for struggling British department store group Debenhams.
Simon Bentley, an outgoing senior independent director of Sports Direct, which owns a near 30% stake in Debenhams, is alleged to have told reporters the board had discussed the possibility of merging the department store chain with its newly-acquired House of Fraser.
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“It’s been discussed, but you do think when you have the job of handling House of Fraser right now, then you might have your hands full,” he reportedly told the company’s AGM yesterday (12 September).
In a statement, Sports Direct addressed the press speculation to clarify it does not intend to make an offer to acquire the entire issued, and to be issued, ordinary share capital of Debenhams.
“This announcement is made in accordance with Rule 2.8 of the Code. As a result of this announcement, Sports Direct will, except with the consent of the UK Panel on Takeovers and Mergers, be bound by the restrictions contained in Rule 2.8 of the Code,” it noted.
Bentley’s comments were made shortly after the unexpected announcement ahead of the AGM that Keith Hellawell was stepping down as chairman with immediate effect.
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By GlobalDataEarlier this week, Debenhams appointed restructuring experts KPMG to look at a number of options for the company, including a potential company voluntary arrangement (CVA).
The retailer, which issued its third profit warning for the year in June, is currently in the midst of a redesign strategy aimed at finding efficiencies through simplifying and focusing the business, with an eye on becoming more digitally-driven. This includes reviewing the closure of up to ten stores and exiting non-core international markets as the retailer, like other chains, has come under increasing pressure from rising costs, reduced high street footfall and competition from online.
