Debenhams shares fluctuate after Sports Direct’s Mike Ashley brands restructuring plan ‘unworkable’
Shares in Debenhams suffered from volatility this morning after Sports Direct owner Mike Ashley branded the troubled department store’s rescue plan "unworkable".
Read more: Debenhams flags 'obvious concerns' with Ashley's £100m CEO bid
Shares in the troubled high street giant dropped 24.5 per cent from 1.59p to 1.2p before rising to stand eight per cent up at 1.7p.
Ashley’s latest intervention comes after Debenhams announced on Friday that it was seeking £200m of additional funds from lenders to allow it to implement a restructuring plan, and that some options would wipe out shareholders.
The announcement followed Sports Direct’s offer of a £150m loan and the purchase of the company’s Danish business Magasin Du Nord for £100m, both of which have been rejected by the department store.
Ashley “strongly recommended” that the board reconsidered his offers and hit out at the firm over a “lack of engagement”.
His offer for the Danish business came with the condition that Ashley be installed as Debenhams' new chief executive.
Read more: Mike Ashley makes fresh £100m bid to become Debenhams CEO
Sports Direct, which is Debenham’s biggest shareholder with a stake of 30 per cent, said: “Regarding the guidance provided to Sports Direct on behalf of the Debenhams board, if guidance as to what might represent a workable solution for Debenhams could result in no equity value for Debenhams' current shareholders, from Sports Direct's perspective and that of Debenhams' wider stakeholders, that is not a workable solution. “