Billionaire retail tycoon Mike Ashley’s Sports Direct has agreed a put option covering 23 million shares in troubled grocer Tesco.

The option, which gives Sports Direct a maximum exposure of £43m, covers about 0.3% of Tesco’s issued share capital.

Sports Direct said: “This investment reflects Sports Direct’s growing relationship with Tesco and belief in Tesco’s long-term future.”

Tesco’s shares have plummeted this week following the revelation of a £250m overstatement of likely first-half profits.

It was the latest disaster to befall the giant grocer which recently drafted in Dave Lewis as chief executive to enact a turnaround.

Sports Direct has previously taken stakes or options in other retailers where it sees a strategic opportunity.

Earlier this year Sports Direct arranged a put option covering a stake in department store group Debenhams.

Sports Direct went on to open concessions in Debenhams stores.

Sports Direct made its move as one of Tesco’s leading investors, BlackRock, sold part of its stake.

BlackRock’s holding is understood to have fallen from just over 5% to just under.

More than £1.5bn of Tesco’s value was wiped out on Monday after the profit overstatement was disclosed.

Tesco has drafted in accountants Deloitte and legal adviser Freshfields to investigate what went wrong at the business.

Tesco had been without a finance director for some months until the arrival this week of Alan Stewart, who was released early by Marks & Spencer after Lewis appealed personally to M&S boss Marc Bolland.

Topics