Thu, 19 Dec 2013 | BUSINESS SALE
A sale is on the cards for department store House of Fraser after the retailer confirmed that it is in discussions with French chain, Galeries Lafayette.
Talks are reportedly at an advanced stage and come as the British department store is preparing for a flotation on the London Stock Exchange in early 2014. Should this go ahead, it is expected to be valued at around £350 million. However, chairman Don McCarthy is thought to be looking for a price tag of at least £450 million should the business be sold.
First reported by the Financial Times, the talks are exclusive at the moment. Two people familiar with the situation told the paper that Rothschild has been hired by House of Fraser to manage the business sale process.
House of Fraser has been conducting informal enquiries into a sale over the past two years, but at the moment discussions are said to be finely balanced and it is unclear whether or not the business will opt to sell or float as a dual-track process is expected to continue.
House of Fraser has over 60 stores in the UK and Ireland and reported a 0.8 per cent increase in sales from stores opened within the last year in the three months to 26 October, as well as an increase in online sales of 31 per cent.
Galeries Lafayette has also been looking at the M&A market for some time now, albeit from the other side. The company offered €1.6bn for Printemps, its neighbouring store on Boulevard Haussman in Paris earlier this year. However, the sale was eventually given to a Qatari-backed investment fund.
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