Shares in contemporary French fashion group SMCP rose in early morning trading after bondholders launched a sale process for a 37 percent stake in the company, potentially clearing the way for a full takeover.

At 09:29 GMT, the shares were up almost 7 percent in trading on the Euronext in Paris at €7.89.

The bondholders, which include asset manager BlackRock and private equity firm Carlyle, became equity owners in the company behind fashion labels Sandro and Maje after European TopSoho, a unit of Shandong Ruyi, failed to meet a debt obligation of €250 million ($265.95 million) exchangeable for shares in the French company in 2021.

The Chinese conglomerate, which embarked on a buying spree in 2015, acquiring labels including Aquascutum, Cerruti 1881 and Savile Row tailor Gieves & Hawkes, sought to build an empire to rival that of luxury behemoth LVMH, but struggled under the debt of its purchases.

An intermediary for the bondholders, Alastair Beveridge and Daniel Imison of AlixPartners UK LLP said Wednesday they have launched a sale process that will take several months, with the initial stage lasting two months.

SMCP said in an emailed statement to Reuters Wednesday that it had been notified by bondholders of the sale process and its board will look into the matter at a pre-scheduled meeting to approve annual results, which will be released Thursday.

Alastair Beveridge and Daniel Imison of AlixPartners UK LLP said it was unclear whether the transaction would trigger a mandatory takeover bid, which any owner above 30% would have to do.

By Sudip Kar-Gupta and Mimosa Spencer; Editor: Kim Coghill and Sharon Singleton

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