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Sports Direct extends put-option wager on Debenhams

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Sports Direct has extended its put-option bet on Debenhams by a year.

In January 2015, Sports Direct owner Mike Ashley agreed a put-option deal with Goldman Sachs for a 10.5% stake in the department store chain.

Under the agreement, once the contract expires if Debenhams’ shares are below the exercise’s price then Sports Direct would have to buy the shares, around 128.9m of them, at that price or pay back the difference. On the other hand, an increase in share price would allow Sports Direct to profit from the premium. This wager has now been extended by a year.

Ashley has said that Sports Direct would be a supportive shareholder in Debenhams. It holds shares in a number of other companies, including Findel.

“Sports Direct reiterates its intention to be a supportive stakeholder in Debenhams and to create value in the interests of both Sports Direct’s and Debenhams’ Shareholders,” a Sports Direct spokesperson said.

Ashley has drawn attention recently as a potential buyer for the recent casualties of the retail world, BHS and Austin Reed. For the former, Sports Direct told the Telegraph that its intention would be to avoid any job losses, and that “all stores would remain open.” 

Published on Thursday 12 May by Philip Gallagher

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