​Sports Direct mulls cash bid for Debenhams

The Mike Ashley-run business said that it believed an offer would be “compelling” for Debenhams shareholders as it would “seek to run the Debenhams business for the benefit of all of Debenhams’ stakeholders rather than for the benefit of Debenhams’ existing lenders”.

It added that the restructuring and refinancing process that Debenhams is currently engaged in could result in “no equity value for Debenhams’ current shareholders”, a charge which Debenhams has previously levied at Sports Direct’s offers of financial assistance.

The business said that while its offer was likely to be in cash, it reserved the right to vary the mix of any offer made.

Debenhams secured a £200m funding injection last week, striking a deal with its existing lenders and noteholders, which it said would “provide liquidity headroom” and “deliver stability for its customers, staff, suppliers and pension-holders”.

A battle for control

Ashley has set his sights on adding Debenhams to the portfolio of high street businesses which he controls. In January he successfully ousted chairman Sir Ian Cheshire and removed chief executive Sergio Bucher from the board.

The mogul, who holds a 29% stake in Debenhams, has requisitioned an extraordinary general meeting in an attempt to remove the rest of the board, with the exception of new chief financial officer Rachel Osborne, and install himself as chief executive. The date of the meeting has yet to be scheduled.

Sports Direct’s bid of a £100m cash offer for Debenhams’ Danish business Magasin Du Nord, on the condition that Ashley is appointed as chief executive of Debenhams, was rejected by the department store chain.

Debenhams acknowledged Sports Direct’s offer but noted that “there is no certainty that any offer will ultimately be forthcoming”.

The business said: “Any firm proposal from Sports Direct regarding an offer for the company will be given due consideration by the board.

“Given the timetable associated with any public offer, an offer for the company would not, in itself, address Debenhams’ immediate funding requirement. Therefore, the company will continue with its plan to obtain the funding required.”