On this day in history : 22nd June 1959 – Shareholders are urged by the directors of Harrods to vote for a merger with the Debenhams department store chain in a £34m deal….
Harrods was started by Charles Henry Harrod as a grocery business in 1849…. His son, Charles Digby took over in 1861 and started to sell a varied range, including furniture, china, cosmetics and perfumes…. Since the 1920s it has become one of the most famous and prestigious department stores in the world….
Over the years Harrods and Debenhams had become informally linked – an official merger would provide a way of cutting overhead costs, resources could be pooled when purchasing stock…. However, as it was Harrods was in the position that two merger possibilities were available to them – the one with Debenhams and a further unofficial one, as yet, with House of Fraser…. Harrods directors began to hold meetings to discuss the options…. The Debenhams deal included an offer of £34m – and would allow Harrods to continue to operate under its own name, with Sir Richard Burbridge as chairman…. Whereas the House of Fraser offer was for £32.5m and the deal would give Harrods directors far less power in the running of the merged company…. It was thought that a merger between Debenhams and Harrods would provide much improved services for the shopping public – the board urged its shareholders to vote for the Debenhams deal….
A third bid of £36m then came in from United Drapery Stores….but was later withdrawn…. The bidding war raged on with House of Fraser raising its bid to 37m and on the 24th of August 1959 it had acquired enough shares to see off the competition from Debenhams…. The battle was over….
In 1985 House of Fraser was bought by Mohammad al Fayed and his brother for £615m and Harrods returned to private ownership…. In 1994 all House of Fraser stores were floated on the Stock Exchange – with the exception of Harrods….