Sports Direct (LON:SPD) released a statement on Monday calling on Debenhams (LON:DEB) to reconsider its offers made to save the struggling department store chain.
The latest offer made by Sports Direct is the acquisition of Magasin Du Nord, Debenhams’ Danish operation, for £100 million, but this has been rejected by the department store chain.
Sports Direct said that it believes its offer for Magasin Du Nord “represents in excess of fair value and addresses Debenhams’ immediate liquidity concerns”.
“Sports Direct notes that it did not receive a response to its invitation to Debenhams to provide further details of its valuation should Debenhams believe Magasin to be worth more than the £100m offered,” it continued.
“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.”
Mike Ashley has made several attempts to snatch control of Debenhams, offering a £150 million loan earlier in March. Debenhams had said it was negotiating funding of the same amount with banks and so Sports Direct offered to fund the entire loan itself, with one of the conditions being that Mike Ashley be made a director and CEO of the business.
Just a few days ago Debenhams announced that it was seeking a £200 million lifeline from its existing lenders. If Debenhams is able to secure the £200 million in alternative funds, it can commence restructuring without Mike Ashley, and potentially dislodge its current shareholders – such as Sports Direct.
The company statement regarding the rejected Magasin offer concluded with the reaffirmation that if Mike Ashley were to become CEO of the department store chain, he would step down from his Sports Direct role.
“Sports Direct would strongly recommend that the Debenhams board reconsiders the offers made by Sports Direct to date and their own duties as directors of Debenham,” the company said.
Numerous UK high street retailers have revealed their struggles as they battle against tough trading conditions, with House of Fraser and HMV only just avoiding administration following recent takeovers.
At 10:00 GMT Monday, shares in Sports Direct International plc (LON:SPD) were trading at +0.035%, whilst Debenhams plc (LON:DEB) shares were trading -1.89% as of 10:06 GMT.