Debenhams says it will give "careful consideration" to Mike Ashley’s offer of a £150m conditional loan under his attempted coup.
The struggling department store chain, which is in advanced talks with its banks on a rival £150m refinancing, cautioned that any loan from the tycoon’s Sports Direct empire would also require the agreement of its own lenders and bondholders.
Mr Ashley, who is the largest shareholder in Debenhams, last week called an investor vote to remove most of the board and install himself as chief executive.
He fired several further shots in his battle to take personal charge on Wednesday.
One was the offer of a £150m loan – interest free – but only if Mr Ashley is handed the top job.
It was also revealed he had raised the stakes further through a complaint to the City regulator, the Financial Conduct Authority.
The letter claimed that a Debenhams trading statement in January, issued weeks before a profit warning, was at best impossibly optimistic or at worst deliberately misleading.
Debenhams responded by describing the complaint as unfounded and self-serving.
Sources at the chain have suggested Mr Ashley’s hostility has become a barrier to engagement and that his interests could be best served by dropping his shareholder vote and talking constructively about his long-term vision for Debenhams.
However, the billionaire has made it clear he opposes the company’s strategy and cannot see the current board building the value of Sport’s Direct’s near-30% holding following a collapse in the company’s market value.
Shares were trading more than 5% higher when the market opened after Debenhams issued its formal response to his offer.
It said: Any third party loan offer on these terms would require both the consent of our RCF (revolving credit facility) lenders and Noteholders and material amendments to existing facilities.
Nevertheless, the board will give careful consideration to the proposal and will engage with Sports Direct and other stakeholders regarding its feasibility in the interests of all parties.
(c) Sky News 2019: Debenhams to ‘carefully consider’ Ashley loan offer