Chinese conglomerate Sanpower has entered an agreement to acquire House of Fraser, in a deal that values the department store chain at more than £450 million.
The deal was announced at a press conference held in China on Friday, with chief executive John King describing the move as an “opportunity to take the brand to China”.
The BBC reported that Sanpower plans to invest £70-80 million into House of Fraser in order to finance a wide-ranging store revamp and website improvements.
However this deal may be derailed as Sports Direct founder Mike Ashley has taken an 11% stake in the chain, The Telegraph reported.
Ashley has been courting House of Fraser for at least two years, but it seemed that his interest cooled after he acquired an interest in Debenhams in January.
According to The Telegraph, the price is likely to be around £50 million, and he acquired the stake from Scottish retail tycoon Sir Tom Hunter. The department store chain has now questioned the validity of the deal, threatening legal action against Hunter and Ashley.
The report said preemption rights attached to the stake mean Hunter should have offered the shares first to the company’s other shareholders.