Debenhams reject Sports Direct deal

The takeover of the chain has become increasingly acrimonious over recent weeks

Debenhams, once the country's biggest chain of department stores, rejected the offer on Monday afternoon.

The other £99m would have been made available if Sports Direct - or any other shareholder with a stake of more than 25 per cent - fulfilled one of two conditions by 8 April.

The department store's owners reportedly have a 5pm deadline on a £150million rescue deal offered by Sports Direct boss Mike Ashley.

Sports Direct has now called for Debenhams interim chairman Terry Duddy and non-executive director David Adams to take their own lie detector tests to "clarify their recollection of this meeting".

In a statement to London Stock Exchange Sports Direct said: "Sports Direct had sought to constructively engage with the Debenhams board, including over the weekend, in order to put together a proposal for a solvent solution for Debenhams in the form of a £150 million pre-emptive equity issuance to existing Debenhams shareholders ("Equity Issuance")". This isn't the first time the chief executive position has been negotiated, but the cash injection proposal comes ahead of a likely administration deal with Debenhams' lenders.

"Ashley becoming CEO is a major sticking point for the lenders; there is a major trust deficit here", the source said, declining to be named because the talks are private.

In an extraordinary outburst, Mr Ashley claimed he and two colleagues subsequently took lie detector tests, with the results showing "without any doubt" that they were telling the truth in their recollection of the meeting.

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The maverick billionaire called on Sunday night for the board of the struggling high street chain to be investigated, two members to undergo lie detector tests, and trading in its shares to be suspended.

If Mr Ashley does gain control of Debenhams, he would control yet another High Street name.

The other half would be released depending on whether Sports Direct launched a firm takeover offer or agreed on the provision of at least £200mln in new funds via a loan or participation in a rights issue.

Laith Khalaf, a senior analyst at Hargreaves Lansdown, said the strings attached to Ashley's offer looked too much for the lenders to swallow.

In it, the Newcastle United owner offered to underwrite a £150 million rights issue for Debenhams.

Russ Mould, investment director at AJ Bell, said: 'Ashley's no-nonsense approach to business has likely been a significant factor in the creation of his retail empire.

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