Debenhams’ fifth-largest investor has called in quits as Mike Ashley battles for control over the struggling department store (LON:DEB). In an email to Financial News, Invesco Asset Management confirmed that it had sold its almost 5% stake in the company.
Invesco Asset Management has declined to give a reason as to why it sold its stake.
“I am no longer a shareholder in Debenhams,” said Martin Walker in an email Financial News. Martin Walker is the UK equities fund manager at Invesco.
At the beginning of March, the Sports Direct (LON:SPD) boss Mike Ashley moved forward with attempts to control the struggling department store.
Debenhams, however, responded with efforts to snatch back control from the Sports Direct boss. It announced that it was in “advanced” talks with banks to borrow £150 million. The fund aims to ensure that credit insurers restore cover for the department store’s suppliers, as well as enabling the business to restructure its store portfolio.
This move was followed a few days later by an offer from Sports Direct to fund the entire £150 million loan. In addition to upping its share of the department store to 35%, Sports Direct has requested that Mike Ashley would also become a director and CEO of Debenhams. Equally, in the event of a whitewash agreement, the loan will be interest free.
Debenhams responded that it has acknowledged Sports Direct’s proposal.
Are investors in the department store chain tired of this game of chess? Invesco Asset Management has not commented why it has sold its entire stake, but Nick Burchett, UK equities manager at Cavendish told Financial News:
“Debenhams risks being diluted and pushed into the ground. They shouldn’t spend all their time sitting in a boxing room with Mike Ashley. They should focus on improving the business.”
At 08:46 GMT Tuesday, shares in Debenhams plc (LON:DEB) were trading -1.84%. Sports Direct International plc (LON:SPD) shares were up 1.35% as of 08:50 GMT.