British department store chain Debenhams PLC said March 26 that it would consider Sports Direct International PLC's potential all-cash acquisition offer but added that any deal would not resolve its short-term funding issues.
Sports Direct said March 25 it could make a full takeover offer for the struggling department store operator, without providing further details, but Debenhams responded by stating that it would not address its immediate funding needs due to the time frame associated with a public offer.
"Therefore, the company will continue with its plan to obtain the funding required, as outlined in Debenhams' statement of 22 March 2019," the company said.
Debenhams on March 22 proposed a £200 million refinancing that could see holders of its equity wiped out, the solicitation process for which is set to run until March 28. Sports Direct criticized the move and said any proposal resulting in zero-equity is "not a workable solution."
In the same March 25 statement, the sporting goods retailer urged Debenhams to reconsider its offer for a £150 million unsecured loan in exchange for an additional 5% stake and the appointment of its founder and CEO Mike Ashley as Debenhams' director and CEO. Sports Direct has also offered to acquire Debenhams' Danish business Magasin du Nord for £100 million in cash, which Debenhams once again said would not help short-term liquidity.
Sports Direct has until April 22 to submit a detailed takeover offer, which must include a price, deal terms and plans to fund Debenhams' restructuring and debt repayments.