Department store operator House of Fraser is being snapped up by a Chinese conglomerate after it agreed to a deal valuing the business at more than £450 million.
Sources close to the transaction said yesterday that Nanjing-based Sanpower had agreed terms on its purchase of a controlling 89 per cent stake in the 165-year-old retailer, which has its origins as a small drapery store in Glasgow.
The retailer was linked to the takeover by Sanpower – which has more than 100 businesses in mainland China – over the weekend.
Chairman Don McCarthy, whose family control 20 per cent of the company, was already believed to have accepted the offer at that point.
Other large shareholders include Icelandic banks and Scots entrepreneur Sir Tom Hunter, with a stake understood to be about 11 per cent.
The takeover deal would see the firm ditch plans to float on the London Stock Exchange later this year.
Sanpower is run by tycoon Yuan Yafei, whose empire spreads across finance, property, media, transport and IT and now employs 30,000 people with assets worth nearly £5 billion.
Reports suggest the business is planning to inject £70m to £80m into House of Fraser in order to finance a wide-ranging store revamp and website improvements.
It may also take the business into China by opening stores or changing some existing sites to the House of Fraser name.
House of Fraser had not issued a statement confirming the deal last night, with a source saying final details needed to be ironed out, though photographs have been published showing bosses of both companies apparently toasting with champagne.
The chain, which generates sales of £1.2bn a year and employs 7,300 people as well as 12,000 concession staff at 61 stores, including Edinburgh institution Jenners, has held a protracted search for new investors in the last year.
France’s Galeries Lafayette had held exclusivity on talks with House of Fraser until the end of January.