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Debenhams on the brink as it rejects £150m Mike Ashley rescue deal

Debenhams is on the brink of falling into the hands of its lenders in a move that will wipe out shareholders after the company and its financial backers rejected a £150m cash injection from Mike Ashley’s Sports Direct.

A pre-pack administration deal is expected to be announced on Tuesday morning that would affect Debenhams’ holding company only, meaning its 165 stores would continue to trade. However, shareholders’ stakes will be rendered worthless, including Sports Direct’s near 30% stake, which cost about £150m to build up.

The retailer’s banks and bondholders also want Debenhams to close about 50 stores via an insolvency process known as a company voluntary arrangement, which is likely to follow within weeks. Landlords will hold a vote on whether to approve the deal, expected to involve stores closing after Christmas and putting thousands of jobs at risk.

Sports Direct said Debenhams had turned down its offer of a £150m rescue package, in the form of a fully underwritten rights issue, in a deal it hoped would keep the company in the hands of shareholders. In a stock market announcement on Monday afternoon after that deal was rejected, Ashley’s retail group said it was still considering making a fully funded takeover bid instead, but no offer had emerged by a 5pm deadline.

With the deadline missed, the most likely outcome for the chain, which has 165 stores and employs 25,000 people, is that lenders will take control of Debenhams. They have lined up administrators to organise a pre-arranged deal under which Debenhams’ listed holding company will go into administration. The group’s operating companies, which run its stores, will then be sold to a new entity controlled by the lenders in return for reducing the group’s £640m debt pile.


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Dr Pepper Snapple merges with Keurig Green Mountain

US soft drink maker Dr Pepper Snapple is to merge with coffee company Keurig Green Mountain to form Keurig Dr Pepper.

The new beverage giant will bring together well-known brands such as Dr Pepper, Orangina, Schweppes and Sunkist with Green Mountain Coffee Roasters.

Keurig Dr Pepper will have a combined annual revenue of $11bn (£7.8bn).

Under the terms of the agreement, Dr Pepper Snapple shareholders will retain 13% of the combined company.

Dr Pepper Snapple shareholders will also receive $103.75 per share in a special cash dividend.

The firms said that the merger would enable Keurig Dr Pepper to have “unrivalled distribution capability to reach virtually every point-of-sale in North America”.


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Sushi chain Wasabi fishes for new funding

The Japanese food chain Wasabi is in talks to sell a stake for the first time in its 16-year history.

New funding will act as a vital growth engine for the sushi and bento seller’s parent company, which manages the outlets along with a handful of Kimchee outlets and an Asian-inspired bakery in Cambridge.

The investment comes amid questions over Wasabi’s finances. Companies House recently issued a notice to strike the company off the register after it missed last year’s deadline to file its accounts.

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UK digital advertising spend to grow to £15bn in 2019

Spending on digital advertising in the UK is set to grow to more than £15bn this year amid a boom in new digital marketing technology, a new report has revealed.

Digital ad spend will enjoy double-digit growth in 2019 as the industry moves away from traditional media forms, according to the latest forecasts by Barclays Corporate Banking.

The optimistic figures come amid an ongoing shift to digital in the sector, with out-of-home (OHH) advertising earmarked as a key area for transformation after digital OOH surpassed traditional outdoor for the first time last year.

Agencies have been grappling with disruption in the industry, with ad giant WPP undergoing a radical transformation plan in a bid to simplify its complex structure.

Despite concerns about sweeping changes across the industry, the report stated optimism remains high, while appetite for mergers and acquisitions remains buoyant.

Sean Duffy, head of TMT at Barclays Corporate Banking, said: “It feels like adtech is slightly pushed to the sidelines, which is a mistake as it is transforming advertising and can be another real growth engine for the UK economy.

“Adtech is already helping UK businesses compete on the global stage and will continue to allow brands to market themselves more effectively as further technology advances are harnessed.”


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River Island family takes control of Mint Velvet in £100m deal

Lewis family says investment reflects high confidence in the business, brand and people.


The family behind the River Island clothing chain has taken control of Mint Velvet, the fashion label founded by three former Principles executives, in a deal understood to value the company in excess of £100m.

The co-founders Peter Davies, Liz Houghton and Lisa Agar-Rea will share a multimillion-pound payout from the deal with the Lewis Trust Group (LTG).

It is a second fashion fortune for Davies, who previously rescued and sold Principles and Warehouse, making nearly £40m in three years.

LTG, which also owns stakes in the Everyman cinema chain and the San Francisco-based fast fashion label Dolls Kill, first bought a stake in Mint Velvet in 2015. It is understood to have exercised an option to take control of the company last week.

Mint Velvet, which specialises in “relaxed glamour” for the over 30s, was started from Houghton’s kitchen table in 2009 and launched with concessions in House of Fraser.

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