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(Alliance News) - Frasers Group PLC on Tuesday confirmed it attempted to acquire Peacocks Stores Ltd after news the embattled fashion brand is set to reopen half its stores.
"Peacocks has been given the wings to fly again in this deal and the reopening of half the stores should help breathe life into high streets reeling from the pandemic," Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said.
Streeter added: "Leading the rescue is Steve Simpson, the chief operating officer of Edinburgh Woollen Mill, which was saved under a similar deal along with Bonmarche in January. He will be under no illusions about the scale of the challenge he faces, but he has clearly convinced the consortium of investors backing him that there is high demand for the mid-market value ranges offered by the chain."
In a statement Tuesday, Frasers confirmed it submitted an expression of interest in Peacocks but was "repeatedly frustrated" by Peacocks's administrator FRP Advisory PLC's "unwillingness to engage substantively or to provide key financial information".
Mike Ashley's Frasers continued: "Frasers Group with its advisors actively participated in discussions with FRP Advisory and representatives of the secured creditor, The Edinburgh Woollen Mill Ltd. However, at no point in the discussions were the secured creditor or the joint administrators prepared to allow Frasers Group the same access to key stakeholders and information as the purported purchaser was allowed."
As a result, Frasers noted, this made it "virtually impossible" to provide a "credible alternative to the purported sale to the connected party".
"Since November, Frasers Group has repeatedly expressed its concerns in relation to the process. On March 27, advisors to Frasers Group sent a letter to FRP Advisory detailing those concerns which included insufficient access to: basic financial information; management information and projections; property details, stock information; retention of title stock and intellectual property. The letter noted that the All-Party Parliamentary Group is looking at the insolvency profession and stated that Frasers Group will fully assist by setting out its experience and concerns," Frasers continued.
Frasers said it has questioned the "rationale" of the Peacocks deal and "strongly" felt the administrators should have investigated the deal further.
It added: "Details of the so-called 'rescue' have not been made public, but the media reports suggest that the consideration was in the form of a deferred loan agreement which we believe would require the involvement and approval of Philip Day."
Shares in Frasers closed 2.6% higher in London on Tuesday at 492.80 pence each. FRP Advisory ended 2.7% higher at 105.00p.
By Paul McGowan; paulmcgowan@alliancenews.com
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