Revolution Beauty has rejected a takeover offer from specialist private equity firm True, leaving the cosmetics group likely to revive a capital raising from existing shareholders, two people familiar with the matter said.

The London-listed makeup and haircare company, whose products retail online and via high street stores including Boots and Superdrug, kicked off a sale process in May, and in June said it had received proposals from a number of parties. True was the only company to submit a bid for the firm, which counts British online fashion retailer Debenhams as its largest shareholder, the people said, asking not to be identified because the talks were private.

However, the offer was seen as undervaluing the company, according to one source. Revolution Beauty declined to comment. Debenhams and True did not respond to requests for comment. Mike Ashley’s Frasers Group had also explored buying the firm but said last month it had pulled out of the process.

Revolution Beauty, founded in Kent in 2014, floated in a post-pandemic listing boom at a valuation of nearly 500 million pounds, but its value subsequently cratered to around 12 million pounds, according to LSEG data. The company is likely instead to revive plans to raise funds from key shareholders if no other bidders materialise, the people said.

It told shareholders earlier this year that it was reviewing its funding structure and mulling a fundraise from key shareholders after its annual sales slumped by more than a quarter. Debenhams’ participation in any equity raise may hinge on the completion of its own debt refinancing plans, the second person said. In May, Revolution Beauty also said it had begun talks with lenders over amending and extending the terms of its revolving credit facilities.