Mike Ashley, the excessive road billionaire, is exploring a cut-price takeover bid for struggling Revolution Magnificence – a transfer that will 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 traders that it was evaluating choices to determine “a extra strong capital construction with further capital to speculate into the corporate”.
It mentioned it had acquired a takeover method from a 3rd get together – regarded as a reference to a bidder apart 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 embody 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 yr 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 numerous 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 sequence of allegations in opposition to the corporate.
Revolution, which positions itself as a mass market magnificence vary, is offered via 1000’s of retailers together with Superdrug shops within the UK.
It constructed a robust following amongst youthful customers by forging collaborations with media properties together with the ITV courting present Love Island.
Frasers’ curiosity in buying Revolution Magnificence would mirror its rising curiosity in increasing past pure retailing lately.
Beneath chief government Michael Murray, it has additionally constructed stakes in corporations corresponding to THG, the proprietor of magnificence manufacturers corresponding to LookFantastic.
As a result of the public sale of Revolution Magnificence is happening via a proper sale course of, the identification of potential bidders doesn’t should be disclosed within the standard means.
It was unclear on Saturday whether or not Frasers intends to make an announcement 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 regarded as unlikely to ascribe a major premium to its present valuation.
Spokespeople for Frasers and Revolution Magnificence each declined to remark.
