Debenhams shares lifted by rumours Mike Ashley might merge it with House of Fraser
Debenhams shares have been boosted by rumours Mike Ashley might merge it with rival House of Fraser.
Ashley, founder and chief executive of Sports Direct, said on Friday he was buying House of Fraser out of administration for £90million.
The news has sparked speculation that the retail tycoon might also swoop on Debenhams, which has issued a number of profit warnings this year, and combine it with House of Fraser.
Takeover? Ashley owns just under 30 per cent of Debenhams’s issued share capital
Ashley owns just under 30 per cent of Debenhams’s issued share capital, close to the threshold at which he must launch an official takeover bid.
Neil Wilson, chief market analyst at online broker Markets, said: ‘The rally in Debenhams’s shares is a clear indication the market believes Sport Direct could be ready to pounce. A move to effectively consolidate the two troubled department store chains into a single offering looks to be the only viable solution to their problems.’
Debenhams shares jumped 13 per cent in morning trading before paring back gains in the afternoon, when they closed up 4 per cent, or 0.51p, at 13.26p.