Published: Fri, March 29, 2019
Markets | By Otis Pena

Sports Direct Intl Plc Statement regarding response from Debenhams Plc

Sports Direct Intl Plc Statement regarding response from Debenhams Plc

Sports Direct has criticised Debenhams, after the beleaguered department store refused to sell billionaire Mike Ashley its Danish business.

In a statement late on Tuesday evening, Chris Wootton, deputy finance chief at Sports Direct, said: "Debenhams shareholders, both major and minority, are sick and exhausted of being ignored, cast aside and trampled underfoot by the lenders of Debenhams who, through the incompetence or, worse, collusion of the board, are allowing these critical stakeholders in the business to be wiped out".

Debenhams has said it will give any firm takeover offer from Mr Ashley's Sports Direct "due consideration" but added that it would not solve its mounting funding crisis.

That compares with a stock-market value of about £26m. He would also be subject to fiduciary duties to Debenhams.

Sports Direct's statement seems like "a desperate last-ditch attempt to remain in the race for control of Debenhams", said Bloomberg Intelligence analyst Louise Parker.

"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 that multiple insolvency processes are required to address Debenhams" current liquidity concerns and to facilitate a wider balance sheet restructuring'.

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Debenhams said it will continue with its plan to seek 200 million pounds of additional funds from lenders that it detailed on Friday.

"The Possible Offer is likely to be exclusively in cash although Sports Direct reserves the right to vary the form and/or mix of any consideration offered".

Debenhams is seeking more than £150m from lenders.

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

On Monday Sports Direct said its representatives and advisors have been in talks with Debenhams' advisory group but it "cannot be said that the board of Debenhams has actively engaged in these discussions or are open to any form of an alternative proposal from any third party". In 2017, he supported former Sports Direct chairman Keith Hellawell, who was kept on the board by Mr Ashley despite opposition from minority shareholders.

Shares in Debenhams were up 39 percent at 2.11 pence at 1048 GMT, valuing the equity at just 26.4 million pounds.

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