Mike Ashley moves in on struggling Debenhams

The owner of Sports Direct, Mike Ashley, has launched a hostile bid to take full control of struggling high street chain Debenhams.

The move came yesterday evening, when Sports Direct issued a Stock Market statement saying it wanted an emergency general meeting of the Debenhams shareholders to try and install the tycoon as its new owner.

Earlier this month Sports Direct announced that it was looking to take control of Manchester retailer Findel Group.

The Newcastle owner has also seized control of House of Fraser after it went into administration and bought Evans Cycles.

The statement added: “If Mr Ashley were to be appointed to the board of directors of Debenhams during this business critical period for Debenhams, Mr Ashley would carry out an executive role, and would focus on the Debenhams business, including building a strong board and management team.

“If appointed, Mr Ashley would step down from his current roles as a director and chief executive of Sports Direct.

“He would be replaced as acting chief executive by Chris Wootton, currently Sports Direct’s deputy chief financial officer.”

Ashley already owns almost 30% of Debenhams.

Debenhams in Market Street, Manchester

The statement added: “Sports Direct wishes to reassure its shareholders that, if Mr Ashley were to be appointed to the board of Debenhams and step down from his roles at Sports Direct, Sports Direct and Mr Ashley have every confidence that acting chief executive Mr Wootton and the other members of Sports Direct’s board and management team have the necessary expertise to continue to successfully run the Sports Direct business.”

In response, a statement from Debenhams said: “The board of Debenhams received notice from Sports Direct last night requisitioning a general meeting of shareholders to propose the appointment of Mr Mike Ashley to the board of directors of Debenhams and the removal of all of the current members of the Debenhams board (other than Rachel Osborne who became a director in September 2018).

“Any shareholder holding more than 5% of the issued share capital has the right to call a shareholder meeting.

“The board has been engaging with Sports Direct and our other stakeholders regarding options to restructure our balance sheet and is disappointed that Sports Direct has taken this action. In the meantime, discussions to address our future funding requirements are well advanced.”

Last month Mike Ashley ousted Debenhams’ chairman, Sir Ian Cheshire and demoted the group’s chief executive Sergio Bucher.

Mr Ashley offered Debenhams a £40m loan before Christmas, which the company rejected.

Debenhams is attempting to refinance £520m in debt facilities, including £320m of loans and £200m of bonds, which are due to be repaid next year.

A deal is expected to include a debt for equity swap and would lead to up to 50 store closures.

There are Debenhams stores in Manchester and Liverpool.