Revolution Beauty has turned down a takeover proposal from private equity firm True, according to sources familiar with the matter.
The London-listed cosmetics retailer is now expected to revisit plans for a capital raise involving its current shareholders.
The company’s shares dropped 13% to close at 325 pence following the announcement.
Revolution Beauty began exploring a sale process in May. By June, it had received interest from several parties.
True was the only bidder to make a formal offer, though sources indicate the proposal undervalued the company. Revolution Beauty’s largest shareholder is Debenhams.
In a statement, the business confirmed its sales process remains active with multiple interested parties and that discussions continue with shareholders about a possible equity raise.
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Meanwhile, Frasers Group, led by Mike Ashley, had also considered acquiring Revolution Beauty but withdrew from the process last month.
Founded in 2014 in Kent, Revolution Beauty went public during the post-pandemic market surge with a valuation near £500 million. However, its market value has since fallen sharply to around £12m.
Earlier this year, the company warned shareholders of a significant drop in annual sales and announced a review of its funding strategy, including a potential fundraising round.
If no new bids emerge, the company is expected to move forward with raising capital from existing investors. Debenhams’ involvement in any fundraising may depend on the completion of its own debt refinancing.
Additionally, the retailer has been negotiating with lenders to amend and extend its revolving credit facilities.
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