Frasers Group CEO Mike Ashley is making a last-minute bid to save troubled department store chain Debenhams from imminent liquidation. After JD Sports pulled out of the bidding process, Ashley sees an opportunity to keep Debenhams in business. He has approached the company’s advisors with a discounted offer that could potentially value Debenhams at over £200 million. The proposed deal would involve Frasers operating the chain’s 124 stores under licenses of 12 months. This bid has the potential to save up to 12,000 jobs that are at risk due to the potential closure of the UK’s oldest and largest department store chain.

This isn’t the first time that Mike Ashley has expressed interest in acquiring Debenhams. In the past, he acquired a nearly 30% stake in the company when it was publicly listed and attempted to have a more active role in its management. However, his offers were rejected by the board, and the company was eventually taken over by a consortium of lenders. Following Debenhams’ administration filing earlier this year, Ashley made another attempt to take over the company, but his reported £125 million offer was considered too low.

While JD Sports was originally seen as a potential buyer for Debenhams, their withdrawal from the bidding process after the collapse of Arcadia seemed to dampen any hopes of a rescue. However, Ashley and Frasers Group are not giving up, even though Frasers’ finance chief, Chris Wootton, warned that the negotiations would be challenging. Wootton pointed out Debenhams’ heavy reliance on Arcadia and the outdated business rates regime that disproportionately affects companies like Debenhams.

There is uncertainty surrounding whether the hedge funds that control Debenhams will accept Ashley’s offer or instead choose to sell off the company’s assets in a fire sale. The proposed valuation of £200 million falls significantly below the £300 million that the hedge funds were reportedly seeking.

In anticipation of its imminent closure, Debenhams has already launched a clearance sale. Since non-essential shops reopened in England, the stores have experienced high levels of customer traffic, and the website has seen heavy demand.

Please find below two links which discuss the potential bid for Debenhams by Frasers Group:

1. BBC: Mike Ashley’s Frasers Group bids to save troubled Debenhams
2. The Guardian: Mike Ashley revives interest in Debenhams sale