Mike Ashley is out of the running to acquire Debenhams after refusing to match the £300m price tag for the beleaguered department store chain.

Ashley is understood to have withdrawn from the running to buy Debenhams after he refused to match the price tag set by Debenhams’ advisers. 

According to The Times, this means Debenhams will now face the choice of liquidating the business, selling off respective divisions to buyers or selling it back to the hedge funds that own its debts.

Frasers Group’s chief financial officer Chris Wootton has reportedly written to chair of the BEIS committee to say that if Debenhams is bought by its present owners or Hilco they will “look to turn the remnants of Debenhams into cash before leaving a bare carcass stripped to the bone”.

Hilco has been put on standby as liquidator if a buyer for Debenhams cannot be secured. It is understood that businesses including Next and Marks & Spencer are interested in buying some shops from the struggling chain but not the whole company, while The Hut Group has reportedly made an offer to buy its website.

According to a letter seen by The Times from Debenhams lawyers, Frasers Group had not made an offer by the deadline last week which, alongside a “gulf” in price meant “the joint administrators regretfully conclude that there is no prospect of concluding a transaction”.