Private equity-backed Debenhams plans £400m capital raising

CVC Capital Partners- and TPG-backed UK retailer Debenhams is planning a £400m capital raising through a placing of shares to slash its £1bn debt pile.

Shares were priced at 80 pence, 13% below the closing price on 3 June. It was expected that both TPG and CVC would not purchase new shares or seek to offload their stakes in the business, which are worth £104.4m and £73.4m respectively.

But according to national reports, CVC dumped £40m worth of its shares hours after the department store's directors had assured analysts that such a sale would not happen - leaving the private equity house with a holding of 33 million shares.

Debenhams delisted from the London Stock Exchange on 5 December 2003 after 99.5% of shareholders accepted a 470p bid by Baroness Retail, a bidding vehicle formed by CVC, TPG and Merrill Lynch Private Equity (MLPE). Merrill sold its stake in the retailer two years ago.

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