Debenhams: Mike Ashley says to make me boss for £ 150m

Retail mogul Mike Ashley offered a £ 150 million injection to struggling retailer Debenhams, as long as he can become managing director.

Mr. Ashley, who is the largest shareholder of Debenhams, has engaged in a battle for control of his board of directors.

Last week, the retailer challenged Ashley to either make a firm take-over bid or abandon his takeover and financing attempt.

Debenhams declined to comment on the offer.

A few days before the deadline imposed by the lender, Sports Direct proposed to guarantee a new equity financing of £ 150 million to the retailer, but only if Mr Ashley became managing director and the lenders, among which banks and hedge funds.

"Relieve the pressure"

Chain store financiers are considering the offer, City sources said.

Sports Direct, which holds a nearly 30% stake in the retailer, previously said it would consider an offer of £ 61.4m to take full control of Debenhams.

In his letter to Debenhams, Sports Direct states, "The appointment of Mr. Ashley would immediately relieve any pressure on the company's supply chain and allow it to direct the restructuring of its stores and operations.

"Sports Direct remains keen to be a supportive shareholder and a financier."

Previous attempts by Sports Direct to install Mr. Ashley as General Manager of Debenham have been rejected.

If Ashley's latest offer is rejected by Debenhams' lenders, the company will likely enter a planned administration, possibly as early as next week.

Stores, staff and suppliers would see no immediate change.

However, under the terms of the transaction, the shareholders, including Mr. Ashley, would see their interest in the company wiped out.

Debenhams is considering a restructuring of the company to give it a more sustainable financial base.

This should result in the closure of about 50 long term stores.

No site should close before 2020 at the earliest.

Record of loss

The retailer will also try to ensure that homeowners reduce the rent of the remaining sites to make them more profitable under a voluntary arrangement with the company.

The distressed department store, which has 165 stores and employs around 25,000 people, recorded a pre-tax record loss of £ 491.5 million last year.

If Mr. Ashley's offer were accepted, he would still control another name for High Street.

In addition to Sports Direct, Ashley leads House of Fraser, Evans Cycles and Flannels.

In January, Mr. Ashley joined the Landmark Group investor to elect the president and CEO of the retailer's board of directors.

Retailers on High Street are under increasing pressure as more and more people choose to shop online and less and less visit stores.