House of Fraser shares tumble as Hunter and Baugur bail out

The prospect of Tom Hunter, Scotland's richest man, bidding for House of Fraser vanished yesterday when he sold his 11 per cent stake in the department store group. More than one-fifth of the retailer found a new home, with Iceland's Baugur also selling its 10 per cent shareholding.

Shares in House of Fraser dipped 8 per cent on the news, which ends almost two years of speculation that Mr Hunter would launch a takeover bid for the owner of Dickens & Jones and Army & Navy. The entrepreneur started building his stake in December 2002, when he made an 85p-a-share approach to buy the group.

Dealers said the stake, sold by House of Fraser's joint broker Dresdner Kleinwort Wasserstein, was placed with a variety of institutional investors at 113p a share, raising £55.6m in total.

A spokesman for Tom Hunter, who just two weeks ago denied reports that Mr Hunter was planning to sell his shares, said: "We didn't really need to cash this in to fund any more deals. We were offered a good price and made a calculated business decision to sell."

The move crystallises more than £9m profit for Mr Hunter, whose private equity group, TBH Investments, owns a number of high-street retailers, including Office, the shoe shop chain, and Birthdays, the greetings card group. City attention will now focus on Mr Hunter's near 8 per cent stake in JJB Sports, which issued a profits warning last month.

Several institutions who are new to House of Fraser are understood to have bought the majority of the 49 million-plus shares that were sold. A number of existing long-term investors also added to their holdings, banking sources said.

House of Fraser's shares fell 9.25p to 117.75p, down from a five-year high of almost 130p. The stock has more than doubled in the past 12 months. Analysts said the prospect of a profits boost from GE Capital, the company that runs its loyalty and stores cards business, had helped to support the stock. The most bullish analysts are predicting that a new agreement with GE Capital could amount to 90p a share to the department store group's value.

Mr Hunter's decision to sell his holding puts paid to his dreams of consolidating the UK's department store sector. Last year he withdrew from a bidding battle for Allders, which was snapped up by the property group Minerva. Allders has recently been put back in play by Minerva's decision to put itself up for sale - but few analysts believe Terry Green, who runs Allders, could raise the funding to combine his group with House of Fraser.

A spokesman for Baugur said it decided to sell because "it didn't look as if a takeover bid would come" for House of Fraser.

ebooksAn unforgettable anthology of contemporary reportage
CSKA Moscow celebrate after equalising with a late penalty

Arts and Entertainment
Life and Style
Designer Oscar de la Renta takes a bow after showing his Spring 2015 collection in September, his last show before his death
fashionThe passing of the legendary designer has left a vacancy: couturier to America’s royalty, says fashion editor Alexander Fury
Life and Style

Company reveals $542m investment in start-up building 'a rocket ship for the mind'

Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album