On Sunday evening, Sports Direct has denied the reports that Mike Ashley, its boss, is trying to hinder a sale of Magasin du Nord, the Danish business of Debenhams.
Reports inferred that Ashley had threatened to pause the £200 million of the business by Debenhams, in which he already owns a 30 percent stake. This comes as he is hoping to force the business into administration prior to picking it up on the cheap and merging it with House of Fraser, the company that he recently acquired.
Recently, the sportswear giant acquired House of Fraser and owns 29.7 percent of Debenhams. It prompted speculations of a possible merger between the two chains.
Last week, an outgoing director of Sports Direct suggested that the idea regarding a merger had been tackled at board level. However, he later said that his remarks had been misinterpreted.
However, in a statement that was released on Sunday evening, Sports Direct strongly denied the claims. It said that Debenhams had not formally discussed with Sports Direct regarding the details of any offer for Magasin du Nord. It added: “we would, of course, consider any such approach on its merits at the time.”
It 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.”
It continued: “To the contrary we have been strongly encouraging the chairman, Ian Cheshire, that Debenhams should cut the dividend entirely and manage cash more prudently for some time.”
Sports Direct concluded: “Indeed Sports Direct has discussed various opportunities for business collaborations to support Debenhams over the last year or so, but the management/board of Debenhams have chosen not to move forward with these proposals, as is their right.”
A spokesperson for Debenhams turned down requests for comment regarding the matter.