Sports Direct owner Mike Ashley is threatening to derail Debenhams’ £200m sale of its Magasin du Nord business, according to reports.
Debenhams, in which Sports Direct owns a 30% stake, is bidding to offload the Danish department store chain in an effort to shore up its balance sheet as it grapples with a £320m debt pile and turbulent trading on the high street.
According to The Sunday Times, Sports Direct is concerned that Debenhams will struggle to command a good price for Magasin du Nord, given its position as a distressed seller.
A source close to Debenhams suggested to the publication that Ashley wanted to force the embattled chain into administration, so that the billionaire could buy the business cheaply and merge it with House of Fraser.
However, Sports Direct has hit back, labelling those suggestions as “irresponsible and incorrect” and insisting it would “consider any such approach [for Magasin du Nord] on its merits”.
A spokesman for the sports and leisure giant said it had discussed “various opportunities for business collaborations to support Debenhams over the last year or so”, but said Debenhams had “chosen not to move forward with these proposals, as is their right”.
The spokesman added: “We do not want to see Debenhams fall into administration, and any suggestion to the contrary is irresponsible and incorrect.
“As a significant shareholder, we would be immediately financially disadvantaged if that were to be the case – quite apart from concern for employees and suppliers.”
Ashley swooped on HoF last month, paying £90m to rescue it from collapse.
Debehmams’ share price has already sunk to below the 12p mark following a series of profit warnings.
Last week it emerged that the retailer has drafted in KPMG to advise on strategic options, including the possible sale of Magasin du Nord or even a CVA.
The latest speculation surrounding Debenhams’ future comes just days after Sports Direct non-executive Simon Bentley allegedly said that a takeover of the department store business had been discussed by the board.
His comments, which came after Sports Direct’s AGM on Wednesday, prompted a stock exchange announcement that insisted the company did not intend to make an offer.