Mike Ashley’s Sports Direct on Monday launched a fresh salvo at embattled Debenhams after the department store chain shunned the trainers and tracksuit-seller’s £100 million bid for its Danish business, Magasin du Nord.
Sports Direct, which is Debenhams’ largest shareholder and has made several offers to the board, said the options it had put forward are superior to “multiple insolvency processes” Debenhams is presently considering to turn itself around.
The latest offer on Friday, to buy Magasin du Nord and install Ashley as the boss of Debenhams, was turned down by the retailer, as it did “not address the company’s funding and restructuring requirement”.
Sports Direct today said it offered more for Magasin du Nord than it is worth. But the Standard understands Sports Direct had last year told Debenhams not to sell the asset for less than £200 million when it first put the division up for sale.
Debenhams is seeking a £200 million cash injection — rather than the £150 million previously thought — from its lenders as part of a restructuring plan that could see existing shareholders, such as Sports Direct, wiped out. Securing the capital is vital for its survival.
The restructuring plan could include a debt-for-equity swap, whereby the lenders take control of the company to cut its debt, or a “pre-pack” administration, which could see Debenhams change hands.
Debenhams shares fell 8% to 1.5p.