Sports Direct has been obliged to issue a statement this evening clarifying that it does not intend to make a bid for department store Debenhams in the near future.
The unusual move came following comments at the sports retail giant’s AGM, which revealed that it had considered making a bid for Debenhams and potentially merging it with its recent acquisition House of Fraser.
Sports Direct has amassed an almost 30% stake in Debenhams in the past few years, just beneath the mandatory takeover threshold. Speculation mounted that it would make a move to buy the chain after it secured the deal to buy House of Fraser last month.
At its AGM today Simon Bentley, the firm’s outgoing senior non-executive director, told journalists that a take-over of Debenhams had been discussed but added, “we might have our hands full” with House of Fraser and suggested no imminent move was likely.
Shares in Debenhams jumped 9% on the back of the comments, having slumped on Monday following the revelation of the weekend that it had appointed KPMG to advise on its future options.
The City watchdog, The Takeover Panel, was forced to intervene and oblige Sports Direct to make a statement, which it did after the markets closed this evening.
“Further to recent press speculation in relation to Debenhams plc, Sports Direct confirms that it does not intend to make an offer to acquire the entire issued and to be issued ordinary share capital of Debenhams plc,” the statement read.
“This announcement is made in accordance with Rule 2.8 of the Code. As a result of this announcement, Sports Direct will, except with the consent of the UK Panel on Takeovers and Mergers, be bound by the restrictions contained in Rule 2.8 of the Code,” it continued.
What this means is that Sports Direct will not make a bid within the next six months, however it has reserved the right to change its mind should there be a material change in circumstances at Debenhams, or if it has the full backing of the Debenhams board, or in the event of a rival bid.
The statement marked the end of an eventful AGM in which Bentley and Sports Direct’s chairman Keith Hellawell both announced they were stepping down from board shortly before the meeting was due to start, even though they had both been listed for re-election. Hellawell will be replaced by Nike executive David Daly.
Sports Direct owner Mike Ashley, who is known for his disdain for the machinations and etiquette of the City, attended the AGM, despite previously suggesting he would be too busy, though he did not speak. Ashley was re-elected to the board though 37% of independent shareholders voted against him (overall however more than 90% of shareholders voted him through). Hellawell and Bentley had both been facing campaigns from shareholders to block their re-election.