Sports Direct swaps 4.6% stake in Debenhams for 6.6% stake via put option

Sports Direct has sold its 4.6 per cent stake in Debenhams just four days after buying – and instead taken out a put option

Sports Direct buys Debenhams stake
Debenhams

The sportswear empire of Newcastle United owner Mike Ashley said it has sold its 4.6% stake in Debenhams, snapped up only three days ago, and instead has entered into a put option agreement for a 6.6% stake in the ailing retailer.

Sports Direct International bought a share in Debenhams on Monday after the department-store chain reported a poor Christmas, hit by discounting in the sector in the run-up to the key retail trading period. Debenhams said it was open to working with Sport Direct to looks at ways to improve its operating performance.

Monday’s move had come as a surprise, as Sports Direct had not told Debenhams it would be buying a stake.

Sports Direct said it was required to transfer cash collateral to cover its obligations under the put option, and the maximum exposure is around £64m.

The sports retailer said in a statement that it was looking forward to meeting with Debenham’s senior management team in the future, and reiterated its intention to be a “supportive stakeholder and create value in the interests of both Sports Direct’s and Debenham’s shareholders.”

As well as 409 stores in the UK, SPorts Direct gas a portfolio of 28 internationally recognised sports, fashion and lifestyle brands including Dunlop, Slazenger, Everlast, Lonsdale and Karrimor.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer