Sports Direct International PLC on March 23 said any restructuring plan Debenhams PLC proposes that could result in no equity value for its shareholders is "not a workable solution."
On March 22, Debenhams said it is seeking up to £200 million for a restructuring that could see holders of the company's equity wiped out. Sports Direct subsequently offered to acquire the department store operator's Danish business Magasin Du Nord for £100 million, an offer Debenhams said "does not address the company's funding and restructuring requirement, while balancing the interests of all stakeholders."
In response, Sports Direct said March 23 that it believes its offer "represents in excess of fair value and addresses Debenhams' immediate liquidity concerns." It added that Debenhams' board of directors has failed to engage with alternative proposals and that the company's lenders are in control of restructuring negotiations.
The British sportswear retailer, headed by Mike Ashley, holds a 29.93% stake in Debenhams and is the company's largest shareholder. Sports Direct has proposed appointing Ashley, who wants all board members except for Rachel Osborne ousted, as CEO and board member in exchange for an unsecured loan of up to £150 million. Sports Direct also said the loan would be interest-free if Debenhams gave it a 5% stake, raising its share to about 35%.
Sports Direct urged the company to reconsider its offer and added that Ashley would step down from his roles at Sports Direct if he were to be appointed CEO of Debenhams.