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Takeover looms

Ashley weighs £61.4m bid for troubled Debenhams

Debenhams

Battle lines being drawn


 

Sports Direct tycoon Mike Ashley is considering a £61.4m bid to take full control of Debenhams in exchange for being installed as chief executive.

The possible offer at 5p per share for the entire issued would represent a premium of approximately 127% to the 2.2p closing price of Debenhams shares last night. Sports Direct would also help Debenhams address its immediate funding requirements.

Sports Direct, which already owns just under 30%, believes that the possible offer would offer fair and full value for Debenhams.  It does not believe that Debenhams has the same value if it is (in effect) handed over to Debenhams’ existing lender group.

Debenhams said it was not making a statement at present, but it has been resisting Sports Direct takeover attempts.

Sports Direct is the biggest Debenhams shareholder, with a 29.7% stake. Brandes Investment Partners, Odey Asset Management, and retail conglomerate Landmark Group are also significant shareholders.

The online retailer Findel is urging shareholders not to back a 161p offer.

Debenhams is attempting a £200m refinancing deal and said yesterday that a takeover by Mr Ashley would not immediately solve its funding crisis.



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