UK: Sports Direct takes 4.6% stake in Debenhams
The acquisition has taken place without the prior knowledge of the Debenhams board of directors
In a stock exchange filing this morning (13 January), the sporting goods retailer, which operates 400 stores across the UK, said it has purchased 56.8m shares in the group.
The company said it wants to "explore options" at an operational level to work with Debenhams to "create value in the interests of both Sports Direct's and Debenhams' shareholders".
"This acquisition of shares has taken place without the prior knowledge of the Debenhams board of directors, but Sports Direct has communicated to Debenhams' board its desire to work together and its intention to be a supportive shareholder," Sports Direct said.
Debenhams share price was up 4.11% to 84.90 pence at 10:41 this morning on the news.
The company saw its CFO Simon Herrick resign earlier this month, just days after the department store retailer issued a post-Christmas profit warning amid weak clothing sales.
Cantor analyst Freddie George said the acquisition would imply Sports Direct is potentially considering splitting the fashion assortment from the sports ranges in its stores over the medium term.
"Sports Direct has looked very closely at acquiring House of Fraser over the last year and has in the past been active in buying stakes in other retail companies, not always with great success, including JD Sports, JJB and Blacks, so in our view one should not read too much into this new investment," he noted.
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