Yahoo Finance Mike Ashley revives interest in Debenhams with 'eleventh hour' bid
Retail tycoon Mike Ashley has made an eleventh hour swoop for Debenhams this weekend, in a move that could save up to 12,000 jobs.
The owner of Frasers Group (FRAS.L), who had a 30% stake in the troubled retailer before it fell into administration last year, has revived his interest in the high street chain which could save it from a fresh liquidation, the Sunday Times first reported.
Ashley’s group, which also owns Sports Direct, is trying to secure a deal with Debenhams’ advisers that could value the company at more than £200m ($268m), depending on how much stock is left, the newspaper revealed.
Frasers would operate the retailer's 124 stores under 12-month licences.
The news comes just days after JD Sports (JD.L) confirmed that it had pulled out of a possible rescue deal for the 242-year old department store chain.
The sports retailer had been involved in exclusive discussions with Debenhams but said in a statement on Tuesday it had ended takeover talks. JD was the last remaining bidder for Debenhams, which has been in administration since April
Geoff Rowley of FRP Advisory, joint administrator to Debenhams, said at the time: “All reasonable steps were taken to complete a transaction that would secure the future of Debenhams.
“However, the economic landscape is extremely challenging and, coupled with the uncertainty facing the UK retail industry, a viable deal could not be reached.”
READ MORE: TopShop-owner Arcadia collapses with 13,000 jobs on the line
The breakdown of rescue talks were partly linked to the administration of Sir Philip Green’s Arcadia Group, which was the biggest operator of concessions in Debenhams stores.
Arcadia, which owns brands like TopShop, Miss Selfridge and Dorothy Perkins, accounted for an estimated 5% of Debenhams’ revenues and the demise of the retail estate threw significant doubt on Debenhams’ future.
Green built the Arcadia brand into a retail Goliath through a series of acquisitions in the early 2000s. At its height, the company’s brands were a stalwart of high streets across the country. However, in recent years, he was embroiled in the scandal surrounding the collapse of BHS, which he sold for £1 in 2015.
Chris Wootton, Frasers finance director, told the Sunday Times that negotiations were on a knife edge: “We hope to be able to save as many jobs as possible,” he said.
“However, we have found that Debenhams has been overly reliant on Arcadia for many years, and with the administration of Arcadia last week, as well as no end in sight to the outdated business rates regime which unduly punishes the likes of Debenhams, it may be a bridge too far.”
Last year Mike Ashley lost around £150m when Debenhams was taken over by American hedge fund Silver Point Capital.
Watch: Debenhams starts liquidation process after Arcadia collapse
