Sports Direct, the sportswear chain controlled by Mike Ashley, agreed a put option of 10.5% in Debenhams on Friday, replacing a 6.6% holding that was announced in January last year.
It follows the sale of a 2.6% stake worth £117m in Sports Direct on Tuesday.
The agreement means that, if the Debenhams share price is less than the agreed exercise price when the contract expires, Sports Direct may be required to settle the option by acquiring ordinary shares in Debenhams at the exercise price.
If the Debenhams share price is higher than the exercise price when the contract expires, Sports Direct will receive a premium and will have no further obligations.
The group’s maximum exposure under the put option is limited to approximately £85m.
Sports Direct made a previous put option agreement of 6.1% with £46m exposure in November, which means collectively the investments represent a 16.6% interest in Debenhams.
The group said: “Sports Direct does not intend to make an offer for Debenhams and would encourage the Debenhams leadership team to concentrate fully on delivering their strategic plans.”
Sports Direct is also understood to be considering making an offer to buy Evans Cycles, which has 56 stores and employs around 1,200 people.