Linklaters and Simpson Thacher lead on £480m acquisition of House of Fraser

Linklaters, Simpson Thacher, King & Wood Mallesons SJ Berwin and Dickson Minto landed roles on the acquisition of a majority stake in House of Fraser by Chinese conglomerate Sanpower.

Sanpower, which is listed on the Shanghai Stock Exchange, acquired an 89 per cent stake in the renowned department store through its subsidiary, Nanjing Cenbest. 

Linklaters advised House of Fraser on the transaction, led by corporate partner Simon Branigan and associate Kanyaka Ramamurthi.

Branigan said: “Part of the reason why the deal is making such a splash in the UK is because House of Fraser is so old and established.”

He added: “We understand that it’s the largest-ever Chinese outbound investment in the retail sector.”

Simpson Thacher scored the key role for existing client Cenbest, fielding City-based corporate and private equity partner Derek Baird and corporate partner Shaolin Luo who is based in Hong Kong.

KWMSJB advised shareholder Bank of Scotland on the deal, led by corporate finance partner Andrew Wingfield. Meanwhile, Dickson Minto was instructed by Caird Capital, another shareholder in the retailer.

It has been reported that House of Fraser could open up to 50 stores across China as a result of the deal. The group currently has 60 stores in the UK and Ireland, and one in Abu Dhabi. 

Background to this deal

This is not the first time that House of Fraser has become a buy-out target. Back in 2006, Slaughter and May advised the firm during talks with private equity giant Apax Partners, which instructed Weil Gotshal & Manges on the ultimately unsuccessful bid (20 March 2006). Allen & Overy advised now-defunct Icelandic retail investor Baugur Group, which acquired a stake in the department store soon after (5 June 2006). 

However, the retailer has turned to Linklaters as its main corporate counsel for since June 2011, when the firm advised its £250m bond issuance led by high yield partner Mark Hageman and banking partner Tom Wells. 

In the past, the retailer has also turned to firms including Field Fisher Waterhouse (5 April 2010) and legacy Herbert Smith for corporate advice. 

Just this year, the retailer instructed Lewis Silkin for defence in a High Court battle against Jack Wills for infringing its company logo of a pheasant in a top hat and cane – a battle which it subsequently lost (31 January 2014).