Mike Ashley is allegedly being sued over an offer to pay an investment banker £15m if he could double the share price of his sportswear chain Sports Direct in three years, according to reports.
Ashley is said to have agreed to pay Jeff Blue, a former Merrill Lynch banker, if he could raise the company’s share price from £4 to £8 in an agreement made during drinks at the Horse and Groom pub in London, The Times has reported.
Blue was head of mergers and acquisitions for Sports Direct but left in February this year.
The newspaper has cited documents in which Blue explained that Ashley initially offered £10m but then raised it to £15m.
Three bankers from the investment bank Espirito Santo were also said to have been in attendance, and one said a fee of £20m was appropriate.
The share price reached 808.5p on February 25 2014, which should have triggered the payment.
But according to court documents seen by The Sunday Times, Ashley said that “a considerable amount of alcohol” was drunk that night and any conversation was just “banter”.
Blue is said to be suing Ashley for £14m.
He received £1m in May 2014 as a reward for his help in getting investors to approve Ashley’s inclusion in a £180m share scheme for the retailer’s staff.
Shares in Sports Direct fell by 15% on Friday to 433.3p following the retailer’s surprise profit warning issued that day. The retailer said annual profits could be £40m lower than it originally stated.