Mike Ashley of Sports Direct buys 11% of House of Fraser

The owner of Sanpower, Yuan Yafei, second from right, with House Of Fraser's chairman, Don McCarthy, second left, celebrating the takeover earlier in the week. Photograph: HAP/Quirky China News/REX

Mike Ashley, owner of Sports Direct, tried to undermine the Chinese takeover of House of Fraser by buying an 11% stake in the department store.

The Newcastle United owner bought the shares from Sir Tom Hunter, an entrepreneur, a week ago, according to the Sunday Times (£), before trying to derail the sale of the business to Sanpower, a Nanjing-based conglomerate, by buying out other investors.

Ashley's attempted coup did not succeed but means that Sanpower, which has agreed terms on a deal valuing the chain at more than £450m, is denied full ownership and is instead taking 89% of the business.

Ashley is understood to have been stalking the 165-year-old department store for 18 months and reports last week of the Chinese business closing in on a deal were said to have infuriated him.

He is said to have long-held ambitions to buy House of Fraser and use it to sell Sports Direct's fashion brands.

But it was believed that investors had doubts about accepting a "low ball" offer from Ashley and turned their noses up at the idea of his involvement as they hoped to take House of Fraser further upmarket.

It is the businessman's latest dramatic foray into the world of household name retailers, after taking an option to buy a 6.6% option in struggling Debenhams in January.

Days ago, the Sports Direct founder suffered a setback when the FTSE 100 group scrapped plans to pay him a shares windfall potentially worth more than £70m after investors failed to back the award.

The sale of 89% of House of Fraser to Sanpower – which has more than 100 businesses in mainland China – ends separate plans to float the chain on the London Stock Exchange this summer.

The department store, which generates sales of £1.2bn a year and employs 7,300 people as well as 12,000 concession staff at 61 stores, has been searching for new investors over the last year. France's Galeries Lafayette was talking exclusively to House of Fraser until the end of January.

House of Fraser, which began as a drapery store in Glasgow, listed on the stock market in 1948 and remained a public company until it was bought by Mohamed Al Fayed in 1985.

It was listed again in 1994 before being bought in 2006 by a group of investors led by Jon Asgeir Johannesson's Baugur Group for £350m.

Sanpower is run by Yuan Yafei, whose empire includes finance, property, media, transport and IT interests and employs 30,000 people with assets worth nearly £5bn.

Reports suggest the business may inject £70m to £80m into House of Fraser to finance a store revamp and website improvements. It may also take the department store into China.

House of Fraser and Sports Direct declined to comment. A spokesman for Hunter's West Coast Capital investment vehicle could not be reached