Friday 22 March 2019 1:32 pm | Updated: Monday 03 June 2019 1:25 am

Debenhams flags ‘obvious concerns’ over £100m bid to make Mike Ashley CEO

Debenhams has turned down Sports Direct's offer to buy its Danish business with the condition that Mike Ashley oust current boss Sergio Bucher to become the company's chief executive.

Earlier today Sports Direct made a £100m offer for Magasin du Nord and claimed it would help the company's liquidity, while also giving Debenhams the freedom to buy it back within 12 months for the same price and letting it keep any revenue.

The deal, which also came on the condition that Ashley be appointed as Debenhams chief executive, was proposed after the revelation that the company had been offered a larger-than-expected lifeline from lenders in the form of a £200m loan.

But in a statement, the struggling department store said: "This proposal comes without any commitment to participate in the wider financing solution.

"The board has responded to Sports Direct directly, that, as with all other proposals received to date from Sports Direct, it does not address the company's funding and restructuring requirement, while balancing the interests of all stakeholders."

It went on to add that Magasin is an integral part of the company's portfolio and any lending proposition, while also addressing concerns about appointing Ashley as chief executive.

"Further, there are obvious concerns with the proposal that Mike Ashley becomes chief executive of Debenhams given that Sports Direct owns our direct competitor House of Fraser," it continued.

Debenhams share price plummeted 58 per cent in early trading as it asked shareholders to back lenders' £200m loan proposal that could end in administration and see shareholders' equity wiped out.

The share price rallied after Sports Direct's proposal to around 34 per cent down for the day, but since that offer has been publicly rejected it has fallen back to standing 41 per cent down at 1.7p.