Friday 10 August 2018 11:27, UK
Sports Direct, owned by billionaire owner of Newcastle United Mike Ashley, has agreed to buy House of Fraser for £90m in cash.
Sky News exclusively revealed that Mr Ashley was close to an agreement after the accountancy firm EY was appointed the administrator for the 169-year-old department store chain.
In a statement to the London Stock Exchange, Sports Direct said it had acquired all of the UK stores, brand and stock of House of Fraser.
The deal represents a stunning coup for Mr Ashley, who has harboured a long-standing desire to move his retail empire upmarket by acquiring one of Britain's leading department store chains.
He has held an 11 per cent stake in the business since 2014, and also owns close to 30 per cent of Debenhams, its main rival.
Under Mr Ashley's stewardship, Sports Direct has accumulated stakes - often through complex financial instruments - in a number of British high street chains, including Debenhams and French Connection.
Sky News revealed last week that Mr Ashley was in talks about providing a rescue package to keep HoF afloat, although in recent days he had faced serious competition to buy the business from Philip Day, the billionaire behind Edinburgh Woollen Mill Group.
Details of Mr Ashley's plans for HoF, including how many of the 17,500 people who work for the company and its concession operators will keep their jobs, are unclear.
However, a rescue deal by a well-capitalised business like Sports Direct will at least preserve a significant number of jobs at HoF.
More than 6,000 roles had already been earmarked to be lost as part of a controversial process which was subject to a now-settled legal challenge from some of HoF's landlords.
HoF's collapse into administration ended 169 years of solvent trading and turned it - at least temporarily - into the biggest high street failure for more than a decade.
Sports Direct wrote to HoF's management last month to set out the terms of a rescue deal, saying it was willing to structure a transaction on similar terms (subject to due diligence to confirm the level of investment/cash injection required) to one proposed by the Chinese owner of Hamleys.
Mr Ashley's company added that it had cash resources available for investment and the ability to support HoF in areas such as "warehousing, online sales and the running of the business generally".
After C.banner International abandoned a £70m funding deal, it left HoF needing £40m by August 20 to avoid going bust.
Bidders for the ailing department store chain were told to submit final offers on Thursday morning, with creditors working late into the night to thrash out a deal.
Mr Ashley's deal ends the tussle for the chain as an unprecedented list of high street names battle to avoid collapse.
So far this year, Maplin, Poundworld and Toys R Us UK have all fallen into administration, triggering about 10,000 job losses.
Numerous other chains, including Carpetright, New Look, Mothercare and - next week - Homebase, have turned to company voluntary arrangement mechanisms to raise hopes of their survival, but at the cost of thousands more jobs.
Retailers have become casualties of a tough market characterised by rising costs combined with caution among British shoppers.
