Mar 27, 2019
Mike Ashley’s last-minute move for Debenhams
If the phrase "Possible firm offer" is an oxymoron, what does that make the offerer? Especially an offerer who is still "Considering" the firmness of the possibility less than 48 hours before a rival deal is voted on? This is a question that the board and shareholders of Debenhams must now ask, after Mike Ashley's Sports Direct waited until 11pm on Tuesday to indicate a price for buying the 70 per cent of the group's equity it does not already own. If Mr Ashley reckoned this late attempt to save face, and his own shareholding, looked convincing, he must think we are morons. As analysts at GlobalData, noted: "His talk of a £61m offer, without actually making one, is hard to take too seriously." Not least because it fails to address the two issues that Debenhams must confront within days: a plan for £560m of debt, which would all fall due on a takeover; and a way to meet about £200m of immediate funding requirements. To be fair to Mr Ashley, he actually has three intelligent reasons for making an offer for Debenhams equity. Mr Ashley tried to get Debenhams on the cheap rather than spell out a logical rationale.
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