Mike Ashley’s Sports Direct said it was considering making a cash offer to buy Debenhams in a bid to save the department store, as a power struggle for control of the business rumbles on.
Last week, Debenhams asked existing lenders for a £200m cash injection that will allow it to enter into new funding facilities and pursue restructuring options to secure its future. However, it added the changes could result in no equity value for the company’s current shareholders.
Sports Direct owns a 30% share of Debenhams.
”Debenhams’ restructuring and refinancing process is likely to result in an adverse outcome for Debenhams’ existing shareholders,” Sports Direct said in a statement to the stock market on Monday.
“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.”
Ashley has described the department store’s refunding plans as “unworkable”.
Debenhams said any offer from Sports Direct would be “given due consideration by the board”, but added that because an offer would not address the immediate funding requirement, it would push ahead with its plans to ask lenders for more cash.
The department store added that any proposal from Sports Direct must provide a clear price, plans on how its existing debt will be repaid and proposals to solve its funding crisis.
Sports Direct has already offered to buy Debenhams’ Danish department store chain Magasin du Nord and provide the retailer with a £150m interest-free loan that would also see Ashley take the reins as chief executive.
Sports Direct will have until 22 April to announce a firm intention to make an offer for Debenhams.