Bloomberg has a good take on Mike Ashley’s last-ditch bid to buy Debenhams:
Debenhams has 124 stores, all rented, and if a deal is completed Frasers could operate them on a 12-month license while determining how many stores could be saved, said a person familiar with the matter, who declined to be identified as the matter is confidential. Debenhams declined to comment on the talks with Frasers Group.
The person said any deal with Frasers would have to be better than the liquidation value of Debenhams and negotiations with FRP Advisory, the administrator that has been in control of the department store since April, were likely to centre on a value of around £280m.
But the collapse of Philip Green’s Arcadia business – which runs Dorothy Perkins and Miss Selfridge concessions in Debenhams stores – could makes a rescue trickier.
“We have found that Debenhams has been overly reliant on Arcadia for many years,” said Chris Wootton, financial director of Frasers, in an emailed statement.
“As well as no end in sight to the outdated business rates regime which unduly punishes the likes of Debenhams, it may may this a bridge too far for the Frasers Group.”
Introduction: Frasers Group in talks to rescue Debenhams
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Could Mike Ashley save Debenhams from liquidation?
Days after the venerable UK retailer’s administrators started to wind it down, Ashley’s Frasers Group is in talks to, possible, rescue the business – which employs 12,000 people.
Frasers told the City this morning that it is negotiating with Debenhams about a possible rescue deal.
However it cautioned that time is short. The collapse of Arcadia (Debenham’s biggest customer) last week makes a rescue package more complicated, the company adds.
Here’s the statement:
The Company confirms that it is in negotiations with the administrators of Debenhams’ UK business regarding a potential rescue transaction for Debenhams’ UK operations.
Whilst Frasers Group hopes that a rescue package can be put in place and jobs saved, time is short and the position is further complicated by the recent administration of the Arcadia Group, Debenhams’ biggest concession holder. There is no certainty that any transaction will take place, particularly if discussions cannot be concluded swiftly
Yesterday, the Sunday Times reported that Ashley was “racing to seal a last-gasp rescue of Debenhams”, adding:
The Frasers Group tycoon has revived his interest in taking over the struggling department store chain at the eleventh hour. The move could save Debenhams from liquidation: the 242-year-old group had seemed set to disappear from the high street for good after JD Sports withdrew from the running to buy it from administrators last Tuesday.
Ashley’s group, which owns Sports Direct, and advisers to Debenhams are trying to thrash out a deal that could value the chain at more than £200m, depending on how much stock is left. Frasers would operate Debenhams’ 124 stores under 12-month licences.
Ashley has been pursuing Debenhams for a long time. He previously built up a near-30% stake in the business, which was wiped out in 2019 when it fell into administration.
Last week, former Debenhams chairman Ian Cheshire predicted that some parts of the UK business could be saved, which could protect some of the 12,000 jobs on the line.
He told Sky News last week:
“(There) is a fantastic business inside it, probably 70 stores, and a very good website which I’m sure someone will be buying, so I don’t think all these jobs are going.
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