Chinese conglomerate raid on House of Fraser

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A CHINESE conglomerate is reportedly considering a last-ditch bid for House of Fraser as the department store chain prepares for a £450 million flotation.

Nanjing-based Sanpower, which has more than 100 businesses in mainland China including shopping centres, is in advanced talks over a swoop for the UK high street chain.

The discussions have been taking place as House of Fraser also considers a separate plan for a summer flotation on the London Stock Exchange.

However, it is believed that Sanpower’s offer has already been accepted by House of Fraser chairman Don McCarthy, whose family controls 20 per cent of the UK company.

The proposals are being presented to other shareholders, including Scottish entrepreneur Sir Tom Hunter, who holds a stake amounting to more than 10 per cent.

Either way, the rumoured price tag of more than £450m would see Hunter pocket almost £50m.

House of Fraser, which generates sales of £1.2 billion a year and employs 7,300 people as well as 12,000 concession staff at 61 stores, has held a protracted search for new investors in the last 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 £5bn.

His plan is said to involve injecting between £70m to £80m into House of Fraser in order to finance a store revamp and website improvements.

House of Fraser declined to comment on the reports.