>>> Debenhams shareholder Sports Direct says board failed in its duty by rejecti

Debenhams shareholder Sports Direct says board failed in its duty by rejecting its offer of GBP 40m loan

Debenhams’ [LON:DEB] biggest shareholder Sports Direct International [LON:SPD] has accused the UK-based department store company’s board of failing in its duty by rejecting its offer of a GBP 40m (EUR 44.8m) loan, The Guardian reported. The newspaper cited a letter from Sports Direct to the chair of a House of Commons select committee for the information
Sports Direct holds a stake of 29.7% in Debenhams. Sports Direct, along with 7.5% shareholder Landmark Group, blocked the reappointment to Debenhams’ board of chairman Ian Cheshire and chief executive Sergio Bucher at Debenhams AGM on 10 January.
Debenhams turned down Sports Direct’s loan offer, saying on Friday that terms of the loan would have put the sportswear retailer in an advantageous position compared to other Debenhams shareholders.
Cheshire resigned following the AGM vote, while Bucher will retain his position but not his board seat, the item noted.
The report went on to say that Terry Duddy, Debenhams’ interim chairman, held a meeting with Sports Direct’s majority shareholder Mike Ashley following the AGM and that the discussions had been “constructive.” The newspaper did not attribute the information to a source.
Sports Direct has yet to indicate why it voted against the reappointment of Bucher and Cheshire, the report continued.
The Times also reported that Ashley had held a “constructive” meeting with Duddy shortly after the AGM vote. The item mentioned talk that Ashley voiced frustration with the way in which Debenhams had been managed under Cheshire and Bucher.
Separately, The Times item said Sports Direct had shortly before the Debenhams AGM appointed the shareholder consultancy firm Morrow Sodali to assist in sounding out other Debenhams shareholders about their views on the company’s performance under Bucher and Cheshire.
It is thought that Morrow Sodali has met with Milestone Resources, which invests on behalf of Landmark Group, the item said. Landmark’s controlling shareholder is the private investor Micky Jagtiani, according to the report.
Sports Direct could not be contacted for comment, while Morrow Sodali refused to comment, the item said.
Debenhams’ share price closed 0.91p down at GBP 3.91p in London on Friday, 11 January, giving the company a market capitalisation of GBP 47.9m (EUR 53.6m).