Debenhams to pay stg£6m to takeover group
The group said it agreed to pay costs of more than stg£1 million a week to the consortium made up of CVC Capital Partners and Texas-Pacific Group for up to five weeks.
It decided to pay the fees in the hope the consortium would trump the offer private equity firm Permira had made for Debenhams, which is understood to value the group at stg£1.54 billion.
A Debenhams' spokeswoman said: "The board took the view that it was in the interests of shareholders to pay these fees if that increased the prospect of receiving a higher offer."
Under the Takeover Code companies are allowed to pay fees of up to 1% of a successful offer to firms considering making a bid.
Meanwhile the board was understood to be locked in talks with Permira over the wording of its bid, with a view to reaching a decision on whether or not to recommend it to shareholders today.
One issue which was thought to be a stumbling block was a so-called "material adverse change clause", which could enable Permira to pull out if there was a deterioration in Debenhams' position.
No formal announcement has been made on the size of Permira's bid, but it is thought the group has not raised its offer from the level it indicated more than two months ago.
Debenhams revealed on May 12 that Permira had made an indicative offer of stg425p per share 28% higher than its value at the start of trading that morning.
But the news sent the stock soaring above the offer level, and the share price was further boosted by confirmation from Debenhams of talks on a potential rival bid by CVC Capital Partners and Texas Pacific Group.
Commentators believe the original figure of stg425p per share would now be too low, due to talks with a rival suitor and a 5% rise in like-for-like sales which the group reported last week.
Shares in Debenhams closed down stg6.5p at stg427p on Friday.
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