Sports Direct considers new takeover bid of struggling Debenhams

The billionaire boss of Sports Direct is considering a cash bid for ailing Debenhams.

Mike Ashley’s company said in a stock exchange statement that it is considering a takeover “alongside other options”.

Sports Direct said it would “seek to run the Debenhams business for the benefit of all of Debenhams' stakeholders rather than for the benefit of Debenhams' existing lenders”.

The move comes as Mr Ashley battles with the Debenhams’ board for control of the department store chain, which is currently in talks with lenders about financially restructuring the business.

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But the refinancing deal could wipe out Sports Directs’ 29 per cent stake in the business - and all the shares of other stakeholders - if lenders take over.

Sports Direct has said its offer is likely to be a cash one.

Debenhams, which has a massive department store in Broadmead, has responded to the announcement, stating: "Any firm proposal from Sports Direct regarding an offer for the company will be given due consideration by the board.

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"Given the timetable associated with any public offer, an offer for the company would not, in itself, address Debenhams’ immediate funding requirement.

"Therefore, the company will continue with its plan to obtain the funding required, as outlined in Debenhams’ statement of 22 March 2019."

The Debenhams’ board has rejected a number of offers from Mr Ashley in recent weeks, claiming there are “obvious concerns” about making the Sports Direct founder chief executive of the department store when he already heads up rival House of Fraser.

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The concerns have been dismissed by Sports Direct.

Debenhams currently requires a £200million cash injection from lenders; this could be made as a debt-for-equity swap or through pre-pack administration.

Mr Ashley has been embroiled in a dispute with the Debenhams' board for months, previously warning that the department store retailer, has "zero chance of survival" without his help.