The chairman of Debenhams has challenged Sports Direct boss Mike Ashley to table a formal bid to buy the department store chain, in which he owns a 29% stake.
Debenhams chairman Sir Ian Cheshire (pictured above) told The Mail on Sunday: “If he [Ashley] comes through the front door with an offer that we can recommend, we are not ignoring him. We are not Little Englanders that have to defend our borders. This is a grown up bunch of people doing the right thing for the broader shareholders and stakeholders, including our 25,000 staff.
”We’re a public company. If you want to make an offer for the other 70% you don’t own, then you’re free at any time.”
Cheshire hinted that the relationship between Sports Direct and Debenhams is growing increasingly strained: “Things got complicated when our major shareholder become the owner of our biggest direct competitor,” he said, in reference to Sports Direct’s acquisition of House of Fraser in August.
“Then it got really disappointing when he leaked a private conversation [regarding the offer of a loan] because the irony is that we actually remain very open to working with him.
‘He has obviously got frustrated – mostly because we wouldn’t do exactly what he wanted. But we genuinely couldn’t, mainly because the board couldn’t hand him a deal where he had effective voting control and secured debtor position which would put him ahead of the pension fund and ahead of our banks.
”I’m sure – at least I hope – that Mike didn’t intend to create this but it destabilises our suppliers.”
In October, Debenhams announced plans to shut 50 underperforming stores after making a £491.5m statutory pre-tax loss for the year to 1 September 2018.
The following month, ratings agency Moody’s downgraded the retailer’s corporate family rating to Caa1, from B2.