Sports Direct has increased its option to buy shares in Debenhams - although the company has confirmed it has no intention of making a takeover bid.
In a statement posted on the London Stock Exchange, the sports retailer, founded by Newcastle United owner Mike Ashley, said it was replacing its put option for 6.6% of Debenhams with a new option to buy 10/5%
The move exposes Sports Directs to Debenhams’ share price to the tune of around £85,.
Sports Direct has now the right to buy 16.6% of the department store, following a similar arrangement revealed in December, 2014.
However, the company said: “Sports Direct reiterates its intention to be a supportive stakeholder and create value in the interests of both Sports Direct’s and Debenhams’ shareholders.
“Sports Direct does not intend to make an offer for Debenhams and would encourage the Debenhams’ leadership team to concentrate fully on delivering their strategic plans.
Mr Ashley’s firm first took a 4.6% stake in Debenhams in January 2014, then sold it four days later to start a chain of derivatives that offer the right to buy shares.
The arrangement sees Sports Direct selling put options to Goldman Sachs.
If shares are above the so-called “exercise price” when the options expire, Sports Direct would effectively get a discount on the shares it is entitled to buy.
Founded in 1982, Sports Direct is the UK’s leading sports retailer by revenue and operating profit, with approximately 400 stores across the UK.
It operates in 19 countries in Europe, including Belgium, Austria, Slovenia, Portugal and France.