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TPG makes £500m profit from Debenhams exit

Debenhams’ shareholder TPG, the American private equity group which took the department store private, has sold its remaining shares in the retailer, for a cool £500m profit.

According to reports, traders said that TPG’s entire 9.34% stake was snapped up by a single unnamed investor, whom Debenhams was trying to identify yesterday.

Insiders said that the buyer could be Och-Ziff, the American hedge fund which owns Peacocks. Arcadia boss Sir Philip Green and Landmark Group boss Micky Jagtiani have also been linked to the stake.

The buyer is expected to identify himself within days to comply with stock market regulations.

TPG’s decision to offload its stake marks the end of an era at Debenhams. TPG co-invested with CVC Capital Partners in Debenhams. They took the department store retailer private for £1.7bn in 2003 with Merrill Lynch joining the consortium later. TPG retained a holding following its IPO in 2006.

Debenhams became the example of the ‘quick flip’ deal whereby private equity would buy listed businesses cheaply and load them with debt before returning them to the stock market.

CVC sold most of its shares in June when Debenhams underwent a £323m capital raising. Neither CVC nor TPG subscribed to the equity raising, which was used to pay down debt and fund acquisitive opportunities.

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