Nanjing Xinjiekou, Chinese department store and subsidiary of Sanpower Group,
has completed its deal to acquire 89 percent of Highland Group Holdings, the parent company of House of Fraser (HoF), as Mike Ashley, owner of Sports Direct retains his 11 percent stake in HoF.
The agreement values the group at 480 million pounds, 30 million more than previously estimated. “We are delighted to have completed the purchase of HoF today. It is an unprecedented transaction and the largest acquisition of a foreign retailer by a Chinese listed company,” said Yuan Yafei, chairman of Sanpower Group in a statement on Tuesday.
News of the deal first broke this April, when Ashley unexpectedly acquired his stake in company from Scottish entrepreneur Sir Tom Hunter. At the time, Sir Hunter told the Telegraph: “Sports Direct offered us the certainty of cash now, over a highly conditional offer from the Chinese.”
A legal dispute between the department store group and Ashley and Sir Hunter came to light as the group threatened legal action against Ashley. HoF argued that the pre-emption rights which are attached to stake should have led Sir Hunter to offer his shares to the group's existing shareholders, prior to striking a deal with Ashley, an outside investor.
However it seems as if this dispute has not affected the deal between Nanjing Xinjiekou and Highland Group Holdings. “We are looking forward to bringing international brands to China through House of Fraser, providing Chinese consumers with premium fashion products,” added Yafei.
“We are extremely confident HoF will become a leading global department store and will serve as a bridge for premium brands between China and Europe.” The Chinese conglomerate offered to acquire the 11 percent stake held by West Coast Capital, a subsidiary of Sports Direct, from Ashley on the same terms as the main acquisition, “but no agreement was finalized.”