LONDON — Nanjing Xinjiekou Department Store Co. Ltd., a publicly listed subsidiary of China’s Sanpower Group, issued a statement to the Shanghai Stock Exchange Tuesday morning confirming reports that the firm has completed talks to buy 89 percent of the U.K. department store chain House of Fraser, and is preparing to sign the deal. The agreement is set to be finalized later this week.
This story first appeared in the April 9, 2014 issue of WWD. Subscribe Today.
The firm also said that it plans to set up a unit in the U.K. to complete the acquisition, which will be paid in cash with its own capital and debt. Nanjing Xinjiekou, a Chinese department store group that carries general merchandise, said its board had approved the stake purchase plan. Sanpower Group, Nanjing Xinjiekou’s main shareholder, is a 5.5 billion pound, or $9.14 billion, Nanjing, China-based conglomerate with a portfolio that spans IT, finance, media, real estate, retail and e-commerce.
As reported, Nanjing Xinjiekou’s deal to buy House of Fraser, which has 60 locations across the U.K. and Ireland, values the British business at more than 450 million pounds, or $750 million.
Meanwhile, it was reported over the weekend that Mike Ashley, the founder and executive deputy chairman of the U.K. activewear retailer Sports Direct, had bought an 11 percent stake in House of Fraser from the British retail entrepreneur Sir Tom Hunter, ahead of the deal with Sanpower. A spokeswoman for House of Fraser said that the company had sent legal letters to both parties, reminding them of the proper procedure for transferring shares, as the stake was not formally offered to existing shareholders. However, the spokeswoman said that the situation “has no impact on House of Fraser’s plan to sell to Sanpower Group.”