Apr 5, 2019

Ashley ramps up threats as Debenhams deadline looms

Mike Ashley, the billionaire founder of Sports Direct, has stepped up threats to take legal action against individual directors at Debenhams as the prospect of him participating in a rescue of the struggling department store group recedes. A letter dated April 4 from Sports Direct to the Debenhams board, seen by the Financial Times, repeated the view that "The directors have not acted in the best interests of the company or to promote its success" and alleged they could be in breach of various duties as outlined in the UK's Companies Act. Mr Ashley and his team have engaged in increasingly hostile communication with Debenhams as the department store group has tried to push through a rescue refinancing that Sports Direct, its largest shareholder, opposes. The talk of legal action comes as Mr Ashley's capacity to influence events at Debenhams wanes. The other alternative proposed by Debenhams - Sports Direct underwriting a £200m rights issue - could lead to an even more expensive outcome, depending on how many other investors take up their shares.

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