Barely a day has passed this past month without reported ‘spats’ between Mike Ashley’s Sports Direct and Debenhams. With a 29.7 per cent stake in the ailing department store chain, Ashley now wants control and is, it is understood, preparing to make a hostile bid to take it over. If successful he will be protecting his investment and potentially offering the Debenhams business the opportunity to succeed once more. However, those at Debenhams are fighting their corner and working around the clock to secure new funding which could well then see Debenhams enter administration to bring about a pre-pack sale which would see all shareholders lose their investment in Debenhams.
Meanwhile, Ashley had tabled an offer of £100 million for Magasin Du Nord, Debenhams’ Danish arm, having previously also offered Debenhams a £150 million loan with the proviso that he take the CEO role, having made arrangements for a replacement to take on his CEO role at Sports Direct. This followed the removal of Sir Ian Cheshire and Sergio Bucher from the Debenhams board.
In a statement to the London Stock Exchange made on Monday 25th March, Sports Direct said: “In Sports Direct’s opinion, Debenhams restructuring and refinancing process is likely to result in an adverse outcome for Debenhams existing shareholders and, accordingly, Sports Direct confirms that, alongside other options, it is considering a possible offer for the entire issued and to be issued share capital of Debenhams not already held by Sports Direct.”
In response, today, 26th March, Debenhams 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.”
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