Sports Direct sparks Debenhams takeover chatter

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Mike Ashley’s Sports Direct has considered merging its newly acquired House of Fraser business with Debenhams, it emerged on Wednesday. 

The sportswear giant’s outgoing senior independent director Simon Bentley said that it had looked at combining HoF and Debenhams, in which Sports Direct owns a near-30% stake.

Bentley told the company’s AGM: “It’s been discussed, but you do think when you have the job of handling House of Fraser right now, then you might have your hands full.” 

The prospect of a takeover sent shares in Debenhams rising 4.3% to 12.8p. They fell nearly 20% to 10p on Monday on fears over its future. Sports Direct rose 3.6% to 353p.

Separately, Sports Direct chairman Keith Hellawell dramatically stepped down amid a barrage of investor criticism over his role. 

Hellawell, formerly Tony Blair’s drugs czar who joined the retailer in 2009, will resign after today’s annual shareholders’ meeting in Soho. He was narrowly re-elected last year. 

Hellawell, 76, as well as Sports Direct boss and 61% shareholder Mike Ashley, faced a crunch vote on their  re-appointments and a potential investor rebellion over alleged corporate governance failings and concerns about employment practices. A trio of shareholder advisory groups had urged investors to vote against their re-election. 

Ashley Hamilton Claxton at investor Royal London Asset Management said: “We voted against the whole board… the remuneration report and the remuneration policy, due to our longstanding concerns with governance at the company.”

The company declined to comment on whether advanced votes had signalled a humiliating defeat for Hellawell. 

Hellawell said: “Having overseen significant improvements in the working practices and corporate governance of the company, which includes a refresh of the board, now is the right time for me to step aside.”

Bentley will also step down after the AGM, with Nicola Frampton, a senior executive at William Hill, joining as a non-executive director from October. 

Cally Price, a Cardiff Bay store manager who joined in 2007 as a casual worker, will attend Sports Direct board meetings from May 2019, replacing Alex Balacki, another employee.

Ashley bought the struggling department store chain from administration for £90 million last month but without taking on its pension liabilities and money owed to suppliers.

Source Article from https://www.standard.co.uk/business/sports-direct-sparks-debenhams-takeover-chatter-a3934256.html

September 12, 2018 |
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