Short-sellers left in a spin as battle for Debenhams starts to heat up

THE bidding war speculation swirling around

Debenhams forced short-sellers to rush out of the bets they have placed on the embattled high street stalwart.

Market participants claimed that some of the hedge funds holding almost 12pc of Debenhams shares started to close their short positions yesterday in anticipation of a price surge.

Debenhams is the third most shorted stock on London’s main market and The Sunday Telegraph revealed that heavyweights Mike Ashley and Philip Day are thought to be circling the department store. Sports Direct boss Mr Ashley is said to be mulling a plan to merge the chain with House of Fraser after snapping up the latter in a £90m swoop.

Short sellers were licking their lips at Debenhams’ 62pc shares plunge in 2018 but fears of a bidding battle for the £160m company caused a short squeeze. Shares spiked as much as 15pc in intraday trade before pulling back to close 0.5p higher at 13.3p, a 4pc jump.

Elsewhere, Alton Towers owner Merlin

Entertainments dipped 4.1p to 375p after UBS warned that reviews from thrillseekers have recently declined along with visitor numbers. Using data from more than 500,000 reviews, UBS found that terrorism was not solely to blame for a drop in visitors at its key Midway attractions, which include Madame Tussauds and the London Eye.

Heidi Richardson, UBS analyst, argued that there was “limited evidence of a London turnaround”.

Card Factory sunk to a fresh all-time low after Berenberg warned clients that the retailer could leave it too late to hit its earnings guidance. Trading will remain “subdued” for the rest of the year and footfall will continue to decline ahead of its crucial fourth quarter, it argued to push shares down 10p to 178p. Plastic piping firm

Polypipe brushed off a 1.3pc drop in pre-tax profit at the interim stage after reassuring investors that a pickup in trading would help it meet full-year expectations. Although the “market outlook for the second half remains mixed”, the impact from Carillion’s collapse is fading, the FTSE 250 company said to climb 20p to 375p.

Berenberg’s retail analysts cherry-picked Asos and Superdry as “indirect” winners from the Turkish lira’s collapse, lifting them 18p to £61.30 and 22p to £11.32, respectively. Turkey has become a “key sourcing market for clothing and, in particular, fast fashion”, it explained. Stocks struggled to recover from Monday’s lira meltdown despite the currency rallying. Mining stocks led the

FTSE 100 38.81 points lower to 7,611.64 after Chinese industrial production missed economists’ expectations in July.