NEWCASTLE United owner Mike Ashley now controls 12.7 per cent of Debenhams, after the tycoon set up a complicated bet on the department store’s future performance.
Mike Ashley’s Sports Direct group has increased its interest in Debenhams, taking control of thousands more shares via a complex financial instrument.
The sports chain’s total interest in the ailing department store group has risen after it sold a 4.6 per cent stake bought last month and swapped it for a put option agreement which gives Sports Direct influence over shares equivalent to 6.1 per cent of Debenhams.
The share sale is likely to have netted a profit for Sports Direct of around £2m.
The put option gives Sports Direct the right to take ownership of 74.2m shares at a set price in future. The financial arrangement, effectively a bet on a rise in the price of Debenhams shares, could cost Sports Direct a maximum of about £46m.
The deal will apply pressure on Debenhams management team as it considers closer ties with Sports Direct. The sports retailer has four concession areas within Debenhams and is also thought to want to introduce its fashion brands, such as Firetrap and Kangol, into the department store.
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