The deal values HoF at around 480 million pounds, 30 million pounds higher than previously estimated. The acquisition is predicted to be finalized in four months and will be subject to customary closing measurements, which includes receiving the approval of the Nanijn Cenbest shareholders.
Deal with Sanpower marks an "exciting chapter" for House of Fraser
Don McCarthy, executive chairman of HoF noted that the deal "opens an extremely exciting chapter in the story of House of Fraser". Sanpower revealed plans to expand the British chain overseas, with emphasis on bringing HoF to China.
Yuan Yafei, chairman of Sanpower and the biggest shareholder in Nanjing Cenbest, shared his plans for HoF: "We have always been looking to invest in strong brands like House of Fraser, and take them to the next level of growth. 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."
McCarthy, who will be stepping down from his current role once the deal is completed, added: "The acquisition by Nanjing Cenbest will allow House of Fraser's management team to continue to grow and invest in the business in the UK 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 also confirmed that the deal with Sanpower puts an end to HoF plans of an IPO.
Following the confirmation of the deal between HoF and Sanpower, the department store chain is currently involved in a legal dispute with Mike Ashley, owner of Sports Direct, who obtained an 11 percent stake in HoF from retail entrepreneur Sir Tom Hunter last week. HoF maintains that the transfer of shares is subject to shareholder agreement and adds if the transfer of the shares goes through, Ashley will not have the right to a position on the company board.