LONDON: Sports Direct International has confirmed that it is considering making a firm offer for the entire issued and to be issued share capital of Debenhams Plc not already held by Sports Direct Plc, and that it has put a proposal to the board of Debenhams as to its terms.[the_ad id=”31605″]The terms of the possible firm offer, as communicated to London Stock Exchange (LSE), are that Sports Direct would offer 5p in cash per ordinary share for the entire issued and to be issued share capital of Debenhams which would value the total currently issued share capital of Debenhams (excluding treasury shares) at approximately £61.4 million.
The possible offer, if made, would represent a premium of approximately 127 percent to the closing price of Debenhams shares on March 26, 2019. In connection with the possible offer, Sports Direct would also assist Debenhams in addressing its immediate funding requirements.
The possible offer is pre-conditional upon Debenhams immediately appointing Mike Ashley as its CEO and terminating the note holder consent solicitation process it announced on March 22, 2019. In addition, the possible offer is pre-conditional upon the Debenhams group agreeing not to enter into any third party funding arrangements (including those outlined in Debenhams statement of March 22, 2019), granting any new security over any of its assets or entering into any administration, CVA or other insolvency process. Each of these pre-conditions must be satisfied or waived before any firm offer can be made.
Sports Direct believes that the offer would offer fair and full value for Debenhams. It does not believe that Debenhams has the same value if it is (in effect) handed over to Debenhams’ existing lender group. As such, Sports Direct would expect the possible offer to be attractive to Debenhams shareholders and other stakeholders as an alternative to Debenhams’ current restructuring and refinancing process.