House of Fraser has sent legal letters to Mike Ashley and Sir Tom Hunter over the manner in which the Scottish entrepreneur sold his 11% stake in the business to Sports Direct.
As reported by Drapers yesterday, the sporting giant has acquired an 11% stake in HoF ahead of an agreement being reached to sell the department store chain to Chinese conglomerate Sanpower.
Hunter told The Telegraph he sold his stake in House of Fraser to Ashley because “Sports Direct offered us the certainty of cash now, over a highly conditional offer from the Chinese”. The deal is subject to shareholder and Chinese regulatory approval.
However, according to pre-emption rights attached to the shares, Hunter should have offered the shares to the company’s other investors first, who include Karen Millen founder Keith Stanford, Lloyds Banking Group and chairman Don McCarthy.
A spokeman for HoF told The Telegraph: “House of Fraser has noted the share sale by Sir Tom Hunter to Mike Ashley. We have sent legal letters to both parties, reminding them of the proper procedures to transfer shares, which have not been followed. This situation has no impact on our plans to sell to Sanpower Group and we will be making an announcement in due course.”
In response, Hunter said the letters had been received and lawyers had responded and “we are entirely comfortable with our position”.