Apr 8, 2019

Debenhams said to reject Sports Direct rights issue offer

Sports Direct's latest attempt to prevent Debenhams from falling into the hands of its creditors has failed, but the company said it is still giving "Active consideration" to a 5p a share cash offer for the department store group. In a stock exchange statement, it said that it had received a letter from Debenhams rejecting a proposal to underwrite a £150m rights issue that would have seen lenders write off £148m but would have prevented equity shareholders being wiped out completely. Sports Direct is the biggest shareholder in Debenhams, with a 29.9 per cent stake. It said in the statement that its plan, which was contingent on Sports Director founder and chief executive Mike Ashley being made chief executive of Debenhams, "Should have been deliverable with the co-operation of Debenhams and its existing lenders." Under the UK's takeover rules, Sports Direct has until April 22 to table a bid for Debenhams, but the department store group had set a deadline of today for Mr Ashley to table a proposal acceptable to its lenders.

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