Sports Direct has hit out at troubled retailer Debenhams for rejecting their latest offer.
In a stock market update, Mike Ashely said his offer to buy Debenham’s Danish business, Magasin du Nord for £100m, is one of many offers they’ve made to the retailer to place the company on a secure footing.
On Monday Sports Direct said their proposals are much better than the, “multiple insolvency processes” the troubled retailer are considering.
Sports Direct said, “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.”
Ashley’s plan would involve him stepping down from all his other roles, to become chief executive of Debenhams, Ashley owns around 30% of the chain store.
Debenhams has put plans in motion to secure £200m in fresh funding from their lenders, this could wipe out existing shareholders, including Ashley’s 30% stake.
Sports Direct said these plans are “not a workable solution”
Debenhams further states that Ashley’s ownership of the House of Fraser will be a conflict of interest if he were to become chief executive.
Sports Direct said, “In any event, were Mr Ashley to become CEO of Debenhams, he would, as previously announced, step down from his roles at Sports Direct.
“He would also be subject to fiduciary duties to Debenhams.
“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 Debenhams.”
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