Sports Direct International PLC said March 25 that it is considering an all-cash offer for Debenhams plc in a bid to keep the struggling department store chain from falling into the hands of its creditors.
The decision follows Debenhams' proposed £200M debt-for-equity swap as part of its efforts to restructure its balance sheet. Sports Direct had criticized the debt-for-equity plan, which could potentially lead to no equity value for shareholders of the department store operator, and said "it is not a workable solution."
In the latest regulatory filing, Sports Direct said its offer would give Debenhams shareholders who want to realize their shareholding the opportunity to do so, and that with the proposed takeover, it would seek to run Debenham's business "for the benefit of all Debenhams stakeholders rather than for the benefit of Debenhams existing lenders."
However, Sports Direct said there is no certainty that an offer will be made.
The sporting goods retailer is Debenhams' largest shareholder with a 29.93% stake. It earlier offered Debenhams 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.