TPG revives Debenhams links with £175m Boohoo debt deal | Money News

The London-listed fashion retailer Boohoo Group is close to securing a £175m refinancing boost in a deal that will revive memories of one of Britain’s most notorious private equity takeovers.

Sky News has learnt that Boohoo, which has been embroiled in a tussle to rename itself as Debenhams, is in advanced talks to secure a significant chunk of debt from TPG, the US-based investment giant.

The discussions are said to be close to an agreement, although precise details, including the ultimate size of the refinancing package and the extent of TPG’s contribution, were unclear on Wednesday evening.

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If confirmed, it will re-establish TPG as a Debenhams stakeholder more than 20 years after the buyout firm was part of a consortium which delisted it from the London Stock Exchange.

In 2003, TPG, CVC Capital Partners and Merrill Lynch Private Equity paid £1.7bn to take the department store chain private in a deal which saddled the retailer with over £1bn of debt.

They then relisted it three years later in a flotation which proved to be lucrative for the private equity firms but became a poster-child for the financial engineering adopted by the industry.

Debenhams’ financial performance deteriorated over the following decade, however, amid rapidly shifting consumer behaviour.

In 2019, the company fell into administration for the first time, before collapsing again soon after the start of the COVID pandemic the following year.

Boohoo, which saw its own valuation soar as consumer and investor demand soared for online fashion retailers, snapped up the Debenhams brand in 2020.

That deal infuriated the Frasers Group tycoon Mike Ashley, who had fought a running battle with the Debenhams board as he attempted to buy the company.

Earlier this year, Mr Ashley used Frasers’ big minority stake in Boohoo to vote down its plans to change its legal name to Debenhams – although the company is now using the name as its corporate brand.

The group’s refinancing needs saw it appoint Interpath Advisory earlier this year.

In May, the Telegraph reported that Boohoo was talking to expensive high-yield lenders about providing a £50m chunk of debt to the company.

TPG and Interpath declined to comment, while Boohoo did not respond to an enquiry from Sky News.