Debenhams’ deadline for takeover bids passes but rescue talks continue

Debenhams gift cards expire as Mike Ashley considers empty stores
Speculation mounts over whether Mike Ashley will place an offer on a portion of Debenhams' stores.
// Debenhams talks go on as bid deadline comes and goes
// However, rescue talks are still ongoing and Debenhams hopes to strike a deal by the end of this month
// It would explore other rescue options only if a deal is not reached, and insists that liquidation is a last resort

The deadline that Debenhams set for potential suitors to make their takeover bids has come and passed with no immediate resolution, as rescue talks reportedly continue.

Yesterday, news emerged that advisers from Lazard – the investment firm working with Debenhams since it was put up for sale in July – had asked interested buyers to submit offers by 5pm.

However, sources speaking to The Times have since said this deadline was only a “checkpoint” to confirm if there was interest in a rescue deal.


Debenhams reportedly wants to strike a deal by the end of this month, otherwise it would start exploring other options that could place more than 12,000 jobs at risk.

Last month, restructuring firm Hilco Capital had been drafted in to work on “contingency plans” for Debenhams, should a sale or rescue be unsuccessful and it falls into liquidation.

The department store has insisted that liquidation was only a last resort.

Meanwhile, Debenhams’ current private equity owners – a consortium of banks and lenders known as Celine – reportedly prefer a restructuring that allows them to stay in charge.

Sky News reported yesterday that even if a sale is agreed, one of the potential scenarios being discussed by buyers is liquidating more than half of Debenhams’ store estate – leaving it with 60 sites – due to an unlikeliness of bidders wanting to take on the entire business as it currently stands.

There has been no confirmation as to who or what businesses have expressed interested taking over Debenhams in part or as a whole, but speculation has been rife that Mike Ashley’s Frasers Group, Next and a Chinese consortium have all mulled the opportunity.

Frasers Group head of elevation – and Ashley’s future son-in-law – Michael Murray told The Times that they would only be interested in individual Debenhams stores that it could convert to its Sports Direct and Flannels chains.

The news comes after Debenhams entered administration in April for the second time within a year – albeit a “light touch” one, meaning directors are still running the retailer rather than handing it over to the administrators.

The retailer has already permanently shut down 20 stores and slashed an estimated 6500 jobs since the pandemic gripped the UK in March – 2500 of which was confirmed just last month.

Before lockdown, Debenhams had around 140 stores and was in the midst of a CVA restructure, which had seen it undergo several store closures after the peak Christmas trading season.

Debenhams currently trades from 124 stores in the UK – all of which the retailer has insisted are trading strongly.

It also trades from 45 sites in 17 countries in Europe, the Middle East and Asia under various franchise agreements.

Separately, last month Celine reportedly hired Philip Watkins and Philip Armstrong from FRP Advisory as advisers to prepare its own administration.

The move means the firm does not have to pay overdue interest payments on £200 million of bonds. It had reportedly been due July 15.

Celine going into administration would not have any impact Debenhams’ sales, staff, customers or suppliers.

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