House of Fraser shareholder Sports Direct sues over business plan (updated)

C banner International Holdings

05/05/2018 15:14

(Updates with reaction from House of Fraser, detail)
    LONDON, May 5 (Reuters) - A minority shareholder of
Britain's House of Fraser, Sports Direct  SPD.L , is suing the
department store chain to gain access to its business plan,
after House of Fraser announced a major restructuring this week.
    House of Fraser said on Wednesday it would close some of its
stores as a condition of securing new funds from Chinese
retailer C.banner  1028.HK , which will become the majority
owner of the department store group with a 51 percent stake.
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    Sportswear chain Sports Direct, which owns 11.1 percent of
House of Fraser, said on Saturday that it had applied to
London's High Court for an injunction requiring House of Fraser
to provide a copy of its corporate plan and other information.
    "We have been frozen out by House of Fraser. Their dealings
in China are opaque, and it is blatant that we have been
unfairly prejudiced," Sports Direct's head of strategic
investments, Liam Rowley, said.
    A spokeswoman for House of Fraser declined to comment.
    C.banner, a major retailer of mid-range to premium footwear
brands in China, bought famous London toy shop Hamleys in 2015.
    House of Fraser was founded in 1849 and has stores in 59
locations across Britain and Ireland, including London's Oxford
Street.
    As part of the restructuring, House of Fraser has said it
will seek to sell stores via a company voluntary arrangement
(CVA), an agreement with creditors to pay them for a fixed
period while it continues trading.
    House of Fraser intends to launch a formal CVA proposal
early next month. A source close to the company said its
management met regularly with Sports Direct founder and chief
executive Mike Ashley, and would give him more details about the
CVA when appropriate.
    Sports Direct does not have a representative on House of
Fraser's board.

 (Reporting by David Milliken;
Editing by Toby Chopra and Stephen Powell)
 ((david.milliken@reuters.com; +44 20 7542 5109; Reuters
Messaging: david.milliken.thomsonreuters.com@reuters.net))