C. Banner pulls out of House of Fraser rescue deal
Chinese retail group C. Banner has walked away from its plans to invest in the struggling House of Fraser department store chain.
The company said it is calling off the deal as a drop in its share price meant its plans to raise funds to invest in House of Fraser are now “impracticable and inadvisable”.
In a statement, House of Fraser said it is now in discussions with alternative investors and exploring options to obtain the required investment on the same timetable as with C. Banner.
House of Fraser employs 17,000 people across the UK.
Earlier this week, it was reported that Sports Direct founder Mike Ashley has approached House of Fraser regarding a new investment deal. Ashley already controls an 11.1% stake in the business. There have also been reports that House of Fraser has been in discussions with Alteri Investors in the last few days.
In May C Banner said it would acquire a 51% stake in the House of Fraser business but this was conditional on the department store reducing its store portfolio via a Company Voluntary Arrangement.
Then in June House of Fraser said plans under the proposed CVA would include the closure of 31 of its UK stores.
Although the CVA was approved by creditors, last week it emerged that the deal faced a legal challenge from landlords in Scotland who argued that the proposals were unfairly prejudiced against certain creditors.
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