Sports Direct considers cash bid for Debenhams

Having offered loans and the acquisition of its Danish arm Magasin du Nord in a bid to gain control of Debenhams, Sports Direct has upped the ante once more and said it is considering a cash bid for the entire issued share capital of the department store.

Debenhams is said to be close to securing a £200m lifeline from investors, which could wipe out all current shareholders including Mike Ashley's Sports Direct, which holds a near 30% stake.

The company issued a statement to the Stock Market after close of trading today to say that it believed the £200m refinancing was "likely to result in an adverse outcome for Debenhams' existing shareholders and, accordingly, Sports Direct confirms that, alongside other options, it is considering a possible offer for the entire issued and to be issued share capital of Debenhams not already held by Sports Direct."

It added that its offer was likely to be made in cash but reserved the right to "vary the form and/or mix of any consideration offered".

The company argued that it was a preferable option for other shareholders as it would allow them to realise their shareholdings should they wish to do so and that Sports Direct would "seek to run the Debenhams business for the benefit of all of Debenhams stakeholders rather than for the benefit of Debenhams existing lenders".

The statement offers no certainty a bid will be made but Ashley seems determined to do all it takes to gain control of the struggling department store. An initial £40m loan offer was rejected then Ashley used his voting power to oust chairman Sir Ian Cheshire and to have Sergio Bucher ejected from the board.

He subsequently offered a £150m interest-free load on the proviso he could up his stake to 35% without being obliged to offer for the full company and that he be installed as CEO. Ashley has also said he wants to wipe the Debenhams board clean with the exception of CFO Rachel Osbourne.

Last week he then made an offer to buy its Danish arm, Magasin du Nord, which would have given the business a £150m cash injection.

The value of any potential bid he may make has not yet been disclosed.