Mike Ashley in fresh push for Debenhams
Mike Ashley has ramped up his efforts to gain control of Debenhams as the department store chain puts in motion plans to secure £200 million in new funding.
The retailer has also announced it will pursue a restructuring plan in a move which could wipe out existing shareholders, including the Sports Direct founder.
Following the announcement yesterday, Sports Direct issued a statement saying it had offered to buy Debenhams’ Danish business, Magasin du Nord.
The terms of the deal would involve installing Ashley as chief executive of Debenhams, to assist in its restructuring process. It would also allow Debenhams to buy back the business at the same price in 12 months, and could even sell it to another bidder at a higher price.
“Sport Direct believes its proposal would provide additional management and firstclass leadership to Debenhams through this challenging period of restructuring, together with additional funding,” the company said. Debenhams later said the offer did not address the company’s funding and restructuring requirements, and Ashley’s appointment as chief executive would be a conflict of interest given his ownership of House of Fraser.
It added it has provided guidance on how Sports Direct can participate in the refinancing, but this has been “repeatedly ignored”.
Sports Direct said in its statement that it had invited further details on valuation if the company believes the business to be worth more.