SPORTS Direct founder Mike Ashley said that he does not propose to make a bid for Debenhams after he increased his financial interest in the retailer.

The Sports Direct chain controlled by the billionaire owner of Newcastle United said it had agreed a so-called put-option deal with Goldman Sachs over a 10.5 per cent stake in Debenhams. The deal replaces an agreement covering a 6.6 per cent holding that was announced this time last year.

The move is the latest punt by the tycoon, who last week sold a 2.6 per cent stake, worth £117m, in the company he founded.

The use of the complex financial instrument means that if the Debenhams share price is less than the agreed exercise price when the contract expires, Sports Direct could be required to buy the stake – the equivalent of 128.9m shares – at that price. If the price rises above the exercise price, Sports Direct receives the premium but has no further obligations. It has set up a similar deal over Tesco shares.

Sports Direct said its maximum exposure under the new put-option was approximately £85m; however it already has £46m on the table to cover another put-option, this time relating to a 6.1 per cent stake in Debenhams, that was struck in November. Together the investments represent a 16.6 per cent interest in the department store chain’s shares.

Experts say buying put-options is a way of gaining access to a stake in a company without tying up capital.