Frasers Group drops out of Debenhams sale

Mike Ashley's Frasers Group is no longer set to acquire Debenhams after refusing to meet the £300 million asking price set by the department store's advisers.

Debenhams is now expected to consider a number of alternative options, including the possibility of liquidation, the sale of individual divisions, or selling it back to the group of hedge funds that own its debts.

Commenting on the group's decision to withdraw from the purchase, Frasers Group's chief financial officer Chris Wootton has written to the BEIS committee and stated that the asking price was "impossible" to reach.

He added that he expects Debenhams to be bought by its present owners or to be liquidated by Hilco, a restructuring specialist who will step in if a buyer can't be secured.

However, Debenhams are also expected to receive offers from other high street brands including Next and Marks & Spencer, who are understood to be interested in buying individual shops from Debenhams. The firm is also thought to have received an offer from The Hut Group for the purchase of its website.

Despite pulling out of the deal, Ashley has expressed is anger after being excluded from the auction of the department store. He stated that it was "almost unbelievable" that he was expected to make a bid on the "woefully inadequate" information provided by Debenhams.

However, Debenhams' lawyers countered the comments, stating that Frasers Group had not made an offer in time for the deadline. This failure, combined with a large difference in the perceived value of the stores, meant "the joint administrators regretfully conclude that there is no prospect of concluding a transaction", they added.

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