SHARES in Debenhams were boosted by rumours that it might be merged with rival House of Fraser.

The deal would mean two of Bournemouth’s biggest department stores – standing on opposite sides of the Square – were in the same ownership.

Mike Ashley, chief executive of Sports Direct, announced on Friday that he was buying House of Fraser out of administration for £90million.

The news sparked speculation that the retail tycoon might also swoop on Debenhams, which has issued a number of profit warnings this year, and combine it with House of Fraser.

Mr Ashley owns just under 30 per cent of Debenhams’ issued share capital, close to the threshold at which he must launch an official takeover bid.

Neil Wilson, chief market analyst at, said: “The rally in Debenhams’ shares is a clear indication the market believes Sport Direct could be ready to pounce.”A move to effectively consolidate the two troubled department store chains into a single offering looks to be the only viable solution to their problems; combining the operations to reduce overheads and stop competing against each other will prove beneficial.”

Debenhams’ shares jumped 13 per cent in morning trading on Tuesday, before paring back gains in the afternoon, when they were up 4.3 per cent at 13.3p.

Since Mr Ashley’s takeover of House of Fraser was announced, Debenhams’ shares have risen by close to 15 per cent.

Sports Direct said last month that it had taken an £85m hit on its stake in Debenhams due its series of profit warnings.

The Bournemouth branch of House of Fraser was due to close under a previous rescue plan whose financial backer pulled out. Mr Ashley has since pledged to save around 47 of its 59 stores.

House of Fraser’s Bournemouth store began life in Victorian times at Bright’s before becoming Dingles. The Bournemouth branch of Debenhams was previously Bobby’s.