Sports Direct boss Mike Ashley proposed to underwrite a £150m equity raise for existing Debenhams shareholders but has also called for members of the department store group’s board to take a lie detector test.
This morning Sports Direct said it was willing to underwrite new shares but that was subject to various conditions, including the appointment of Ashley as Debenhams’ chief executive and Debenhams’ lenders agreeing to write off £148m of debt.
Sports Direct said it ”continues to give active consideration” to a possible 5p per share cash offer for Debenhams and that it has until 5pm on April 22 to make a bid or walk away.
The fate of Debenhams may become clear later today or tomorrow morning, when the retailer’s lenders will decide its future. They may engage further with Ashley but, if not, a pre-pack administration is likely.
Sports Direct stepped up its war of words with Debenhams’ board over the weekend when it claimed that “misrepresentations were made [at a single meeting] to induce Sports Direct into signing a non-disclosure agreement, locking them out of any ability to trade in the bonds or equity of Debenhams for a period of time”.
Sports Direct said Ashley and two others had already taken lie detector tests, which “showed without any doubt” that they were giving an accurate account of the meeting.
“Indeed, Mike Ashley’s score for example was so significantly high as to be considered rare in comparison to others,” according to the Sports Direct statement.