C.banner has pulled out its House of Fraser rescue deal worth £150m due to a dive in its share price.
The Hamley’s owner said the deal had been “rendered impracticable and inadvisable” following the fall. House of Fraser is now urgently seeking a £50m investment in order to avoid collapse.
C.banner said in a statement to the Hong Kong stock exchange: “In view of the fact that the recent market prices of the shares as quoted on the stock exchange have significantly dropped to a level which is far below the placing price range of HK$2.40 to HK$3.00 per placing share, the company and the placing agent are of the opinion that the placing has been rendered impracticable and inadvisable, and therefore no longer intend to proceed with the placing.”
The department store chain is now said to be “exploring options to obtain the required investment on the same timetable”. Reports have hinted that potential investors may include Sports Direct boss Mike Ashley.
Financial troubles at House of Fraser range from a struggle to pay a quarterly rent bill of almost £25m to a £10m overdraft. House of Fraser agreed a court-approved extension of its debt repayment deadlines last week.
C.banner’s investment was originally delayed by legal action from landlords over House of Fraser’s CVA. The deal was subject to the department store’s CVA being passed.
The Hamley’s owner saw its shares plummet by 70% following news of the company’s investment in House of Fraser.