Short sellers who have bet against Debenhams are scrambling to close their positions in anticipation of a price surge.
The retailer’s shares have plunged as much as 62 per cent this year, providing low hanging fruit for short-sellers expecting its imminent demise.
Though the embattled department store is the third most shorted stock on the London Stock Exchange, rumours emerged earlier this week that both Sports Direct’s Mike Ashley and Edinburgh Woollen Mill’s Philip Day are eyeing the department store.
Regarding the rumours, a spokesman for Day said: “Mr Day has absolutely no interest in Debenhams.”
Ashley, who already owns a near 30 per cent stake in Debenhams, is also thought to be considering merging Debenhams and his newly acquired department store House of Fraser, which he bought last week in a pre-pack administration for £90 million.
The rumours have sent Debenhams’ shares rising from 11.92p per share on August 10 when House of Fraser was bought, to a peak of 14.29p this morning, up over 25 per cent.