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Mike Ashley snaps 11% stake in House of Fraser

RBR Staff Writer Published 07 April 2014

Mike Ashley, founder and deputy chairman of specialty retailer, Sports Direct International (SDI) has snapped up an 11% stake in British department store chain House of Fraser, which was taken over by the Chinese conglomerate Sanpower last week in a £450m-plus deal.

House of fraser

Established in Glasgow, Scotland in 1849, House of Fraser offers clothing, cosmetics and houseware products. It presently has 61 stores in Britain and Ireland and had annual sales of about £1.2bn.

Ashley bought his stake in the department store giant from Scottish businessman Sir Tom Hunter through his Sports Direct chain.

Sir Tom was quoted by The Telegraph as saying that 11% stake divestment in House of Fraser to Mike Ashley is because Sports Direct offered the certainty of cash now, over a highly conditional offer from the Chinese.

The deal with Sanpower, which is buying the remaining 89% stake in House of Fraser, is anticipated to take long time as it requires shareholder and Chinese regulatory approval.

Separately, House of Fraser, which is struggling to regain profitability, is threatening legal action against Sir Tom and Mr Ashley following their agreement.

Sports Direct had recently reported 23% rise in profits for the Christmas period, with the demise of rival JJB Sports, further adding to the prospect of better sales.

The retailer currently operates 400 stores in the UK with presence in Ireland, Belgium, France, Portugal, Holland, and Slovenia.

Image: House of Fraser in Belfast.Photo: Courtesy of Ardfern.



Source: Company Press Release