LONDON — Nanjing Cenbest, otherwise known as Nanjing Xinjiekou Deparment Store Co. Ltd., a Chinese department store chain and a subsidiary of the Chinese conglomerate Sanpower Group, said Saturday that it has signeda definitive agreement to acquire 89 percent of the U.K. department store group House of Fraser, in a deal that values House of Fraser at around 480 million pounds, or $804.3 million at current exchange.
The deal, announced in a joint statement from Nanjing and House of Fraser, comes after weeks of talks between the two firms.
The deal is due to close in four months, the companies said, and is subject to conditions including the approval of Nanjing Cenbest shareholders and Chinese regulatory clearances.
House of Fraser's executive chairman Don McCarthy commented of the deal: "The acquisition by Nanjing Cenbest will allow House of Fraser’s management team to continue to grow and invest in the business in the U.K. and Ireland, provide a strong platform from which to expand the brand in international markets and to further develop our multichannel, stores and premium fashion offering," he said. On completion of the deal, McCarthy will step down from House of Fraser.
McCarthy also confirmed that the deal ends House of Fraser's plans to list on the London Stock Exchange.
Yuan Yafei, chairman of Sanpower Group, the largest shareholder in Nanjing Cenbest, underlined his global ambitions for House of Fraser:“We have always been looking to invest in strong brands like House of Fraser, and take them to the next level of growth," he stated. "With House of Fraser, we see significant opportunities to develop the business further and replicate the already successful model in international markets, in particular in China. We are very much looking forward to working closely with [House of Fraser chief executive] John King and his management team to enhance the business and unlock House of Fraser’s potential to become a leading global brand."
The House of Fraser board has approved the transaction, the companies said. The firm also noted the transfer an 11 percent stake in House of Fraser from retail entrepreneur Sir Tom Hunter to Sports Direct, the firm owned by Mike Ashley. House of Fraser said that the transfer is subject to shareholder agreement, and if it does complete, the shareholding — owned by Ashley — loses the right to a board position.
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