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Mike Ashley’s Sports Direct attacks struggling Debenhams for rejecting its proposals | Business News

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Mike Ashley’s Sports Direct has attacked Debenhams for rejecting proposals designed to save the struggling retailer – arguing its approach is better than the “multiple insolvency processes” currently being considered.

The retail tycoon, whose Sports Direct empire is the largest shareholder in Debenhams, has made several offers to the board – all conditional on Mr Ashley being given the chief executive’s job.

The latest was a £100m offer for Debenhams’ Danish operation Magasin du Nord – rejected on the grounds it did “not address the company’s funding and restructuring requirement”.

For its part, Debenhams confirmed on Friday it was seeking a £200m funding lifeline from its lenders as part of a restructuring that could see existing shareholders, such as Sports Direct, wiped out.

It would be likely to include a so-called debt-for-equity swap – in which lenders would take control of the company’s shares in exchange for cutting its debt.

Sports Direct founder Mike Ashley
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Sports Direct founder Mike Ashley wants to take control of Debenhams

Sports Direct said on Monday it had made an offer for Magasin “that it believes represents in excess of fair value and addresses Debenhams’ immediate liquidity concerns”.

It added: “The offer for Magasin is one of several offers that Sports Direct has made to provide the board of Debenhams with a valid alternative to its apparent view that multiple insolvency processes are required to address Debenhams’ current liquidity concerns and to facilitate a wider balance sheet restructuring.”

Sports Direct also dismissed claims that installing Mr Ashley as chief executive of Debenhams would create a conflict of interest with rival House of Fraser – now owned by Sports Direct after a rescue deal last summer.

Its statement said: “In any event, were Mr Ashley to become CEO of Debenhams, he would, as previously announced, step down from his roles at Sports Direct.

“He would also be subject to fiduciary duties to Debenhams.”

It concluded: “Sports Direct would strongly recommend that the Debenhams board reconsiders the offers made by Sports Direct to date and their own duties as directors of Debenhams.”

Shares in Debenhams have tumbled over almost a year to leave it with a market value below £20m ahead of Monday trading – with current values reflecting its restructuring announcement.

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