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.
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 ascertain “a more robust capital structure with additional capital to invest into the company”.
It mentioned it had obtained a takeover strategy from a 3rd occasion – regarded as 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 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 regarding 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 via hundreds 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.
Below chief government Michael Murray, it has additionally constructed stakes in firms similar to THG, the proprietor of magnificence manufacturers similar to LookFantastic.
As a result of the public sale of Revolution Magnificence is going down via a proper sale course of, the id of potential bidders doesn’t should be disclosed within the standard 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 regarded as unlikely to ascribe a big premium to its present valuation.
Spokespeople for Frasers and Revolution Magnificence each declined to remark.
