Sports Direct makes £150m offer to underwrite Debenhams in bid to make Ashley CEO

A bitter and hard-fought battle for control of one of Britain’s oldest department store chains descended into farce last night as Mike Ashley tussled with Debenhams to prevent the retailer from entering into a pre-pack administration.

In his latest efforts to ramp up pressure on the chain’s board, the Sports Direct owner last night accused Debenhams and its advisors of undertaking a “sustained programme of falsehoods and denial” and called on two of the firm’s directors to take a lie detector test.

The billionaire also confirmed reports that he and two other Sports Direct members have taken a lie detector test to prove that they were telling the truth over details of a meeting they had with Debenhams executives, with Sports Direct adding that Ashley’s detector score was “so significantly high as to be considered rare in comparison to others”.

The sportswear retailer also called on industry regulators to “investigate fully how Debenhams is currently being run and how the market and stakeholders are being misled”, adding that “shares should be suspended pending investigation”.

The comments mark the latest bizarre twist in a public feud between the two sides, whose standoff comes to a climax today as Debenhams looks set to hand over ownership to lenders.

On Friday night Sports Direct sent a letter to the board of Debenhams offering to underwrite £150m of new equity funding on the condition that he is made chief executive.

The move came after Debenhams secured a £200m refinancing deal with lenders last week, in a development that would mean shareholders, including Ashley – who owns nearly 30 per cent of the business – could see the value of their stake wiped out.

Debenhams said that Sports Direct needed to make an offer, provide debt funding or underwrite a rights issue of new stock if it wanted to prevent creditors from taking control of the department store chain.

One source close to Ashley said yesterday: “Mike has made his move…this time they can’t just call it a load of crap.”

However, Sky News last night reported that Debenhams has set out four conditions which Ashley must meet before it will engage with him. One of the conditions is that Ashley would need to cast aside his efforts to oust the board.

Another condition is that Ashley must provide a legal guarantee that the £150m he has promised would be provided if Debenhams decides to approve his bid for the top role.

If a refinancing deal involving Ashley is not agreed by this afternoon, hedge funds led by Silver Point are expected to take full control of the business tomorrow.