Mike Ashley, the excessive avenue billionaire, is exploring a cut-price takeover bid for struggling Revolution Magnificence – a transfer that might stoke animosity between him and rival London-listed retailer Debenhams.
Sky Information has learnt that Frasers Group, which owns retailers starting from Home of Fraser to Evans Cycles, has approached Revolution Magnificence a couple of potential supply for the corporate.
Retail business sources mentioned this weekend that Frasers was contemplating whether or not to bid however was not sure to take action.
Revolution Magnificence, which sells branded cosmetics, put itself up on the market final month because it warned buyers that it was evaluating choices to ascertain “a extra strong capital construction with extra capital to take a position into the corporate”.
It mentioned it had acquired a takeover method from a 3rd get together – considered a reference to a bidder aside from Frasers Group – and invited different suitors to contact its advisers at Panmure Liberum, the funding financial institution.
To facilitate the sale course of, Revolution Magnificence has parachuted in Iain McDonald, an skilled Metropolis determine whose directorships embrace a seat on the board of Debenhams Group, as chairman.
Debenhams holds a big minority stake in Revolution Magnificence, whereas Frasers is a giant shareholder in Debenhams and blocked the change of its authorized title from Boohoo earlier this 12 months by voting in opposition to the plan.
Revolution Magnificence has had a torrid run on the London inventory market, and now has a market capitalisation of barely £20m.
Its inventory has collapsed by over 70% within the final 12 months alone.
The corporate has at varied factors been embroiled in probes referring to its accounting and a multimillion pound settlement with its founder, Adam Minto.
In January, it reached a settlement with Chrysalis Investments, its former shareholder, after it made a collection of allegations in opposition to the corporate.
Revolution, which positions itself as a mass market magnificence vary, is offered by means of 1000’s of shops together with Superdrug shops within the UK.
It constructed a powerful following amongst youthful shoppers by forging collaborations with media properties together with the ITV courting present Love Island.
Frasers’ curiosity in buying Revolution Magnificence would replicate its rising curiosity in increasing past pure retailing in recent times.
Underneath chief government Michael Murray, it has additionally constructed stakes in corporations reminiscent of THG, the proprietor of magnificence manufacturers reminiscent of LookFantastic.
As a result of the public sale of Revolution Magnificence is going down by means of a proper sale course of, the identification of potential bidders doesn’t should be disclosed within the common method.
It was unclear on Saturday whether or not Frasers intends to make a press release confirming its curiosity to the London inventory market subsequent week.
On Friday, shares in Frasers closed at 728.5p, giving it a market worth of £3.3bn.
Any supply for Revolution Magnificence is considered unlikely to ascribe a major premium to its present valuation.
Spokespeople for Frasers and Revolution Magnificence each declined to remark.
