The potential backer of House of Fraser has officially confirmed that it is trying to cancel its deal to acquire the company. It comes after the backer said earlier this week that it had already canceled a placing.
C.banner had agreed to acquire a majority stake in the House of Fraser. Today, it informed the market that it is having some talks with the retailer and Sanpower, its owner, regarding the cancellation of their arrangement.
The shares in C.banner have already crashed to an all-time low on the back of the news regarding the confirmation.
The announcement confirms what had already been inferred from the announcement of the company last Wednesday that it would not be allocating new shares in order to raise cash. When the deal was originally announced, C.banner said that it would make use of a placing to raise its planned £70 million investment in House of Fraser.
This leaves the firm in the hands of Sanpower, however, it will have new potential investors and owners circling. House of Fraser will be required to raise approximately £50 million to avoid going under by the time that the company’s rent bill rolls around this coming September.
Currently, the potential saviours are believed to include Mike Ashley, the founder of Sports Direct, who has been in discussion with the company for at least a month, and Philip Day, the Jaeger owner.
Meanwhile, a court date has now been scheduled for the legal challenge to the CVA of the House of Fraser. Landlords are protesting its plans to close 31 shops and requests for rent discounts on 10 other stores.
The resolution of the legal battle with landlords could be a significant step towards securing the required £50m worth of new funding. Alex Williamson, the chief executive of the department store, has said that the closure of 31 out of the 59 stores of House of Fraser was the “only viable option” in order to secure the future of the business.
However, part of the initial claim criticised the funding agreement with C.banner.