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1959: Harrods in 34m merger talks
Directors of leading London store Harrods are urging shareholders to vote for a merger with the Debenhams department chain.

The directors have been meeting to consider two merger proposals - one from Debenhams and another, as yet unofficial, proposal from Hugh Fraser, head of House of Fraser.

Debenhams and Harrods have been linked together informally for years. The proposed formal merger of interests is seen as a way of cutting costs through pooling resources on buying goods and internal administration.

The Debenhams offer is worth 34m - the House of Fraser proposal about 1.5m less and it also comes with fewer voting rights on the new board.

Benefit the shopping public

Under the terms of the Debenhams deal, Harrods would continue to operate under its own name and Sir Richard Burbidge would continue as chairman.

He and one other Harrods director would join the board of Debenhams. In return, two Debenhams directors would join the Harrods board.

A statement published in today's Times newspaper said: "This proposed merger of interests should improve the services of the businesses in both groups to the benefit of the shopping public."

The House of Fraser offer - which has yet to be made formally - would give Harrods bosses a far smaller say in the running of the newly merged company.

Harrods Knightsbridge store has been one of the biggest and most prestigious department stores in London since the 1920s.

The House of Fraser group, which expanded rapidly in Scotland in the late 1940s, has already got a foothold in London. In 1957, it bought the Kensington-based John Barker store group.

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Contemporary view of Harrods
Harrods was returned to private ownership under Mohammed al Fayed


In Context
A third group, United Drapery Stores, entered the bidding war with an offer of 36m but later withdrew.

The battle was won by House of Fraser, which raised its final price to 37m. It acquired enough shares on 24 August 1959 to beat off the competition from Debenhams.

Harrods was started by Charles Henry Harrod as a family grocery business in 1849.

In 1861 Harrod's son, Charles Digby Harrod, took over the business and began selling a much wider range of products including furniture, china and perfumes.

The company was floated in 1889 and began a massive expansion programme.

The store returned to private ownership in 1985 when Mohammed al Fayed and his brother bought the House of Fraser for 615m.

In 1994 all 56 House of Fraser stores, except Harrods, were floated on the stock market. The firm has been the subject of several takeover approaches in recent years.

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