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Frasers Group PLC said Friday it has acquired Studio Retail Ltd, the main operating business of Lancashire-based Studio Retail Group PLC, for GBP26.8 million in total.
On Thursday, Studio Retail had appointed Daniel Butters and Daniel Smith of Teneo Financial Advisory Ltd as joint administrators, to set up advanced talks for the sale of the group's business and assets. As a result, Studio Retail's shares were cancelled from the London Main Market at Friday's open.
The appointment of administrators followed a failed financing attempt to raise additional working capital needed to fund the company as it tried to sell off surplus stock.
Frasers - which owns the Sports Direct, House of Fraser and Flannels chains - will pay the consideration in cash, and release Studio Retail from its liabilities to lending banks under its revolving credit facilities.
Frasers also will act as guarantor in respect of some payments into the Studio Retail group pension scheme.
"The administrators are of the opinion that the transaction was in the best interests of the company's creditors as a whole. In addition, while Studio Retail Ltd itself was not in administration, it had temporarily ceased taking orders and the transaction will allow trading operations to resume, ensuring continuity for suppliers, the group's over 1500 employees, pension holders and customers," Studio Retail Group stated.
Shares in Frasers Group, which is 65% owned by Mike Ashley, were up 2.3% at 635.00 pence on Friday in London.
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