House of Fraser and Debenhams merger has ‘been discussed’

Mike Ashley major shareholder at Sports Direct with chairman Keith Hellawell

Image Mike Ashley's majority shareholding has previously saved Mr Hellawell from losing the position of chairman

Sports Direct already owns almost 30 per cent of Debenhams and has seen the value of its stake plummet this year as Debenhams' share price has fallen by 60 per cent since the start of January.

The company reserved the right under Takeover Panel rules to make a bid if there was a "material change of circumstances" at Debenhams, with full agreement of the company's board or after a bid from a third party.

Mike Ashley's retail empire, which owns nearly 30% of Debenhams' stock, sought to clarify its position after remarks by an outgoing non-executive director to Sports Direct's AGM on Wednesday.

Analysts have speculated about the possibility of a tie-up between the two department store chains since Sports Direct bought House of Fraser for £90m last month.

He then suggested Sports Direct could move in on Debenhams - where it already owns a 29% stake - when the time was right.

"It would be hard subdividing a building like that", he said, "but we are absolutely determined to secure a positive future for that site, whatever that may be".

Sports Direct last month said that its board had agreed that CEO Ashley, who owns 61 percent of the sportswear retailer, would not be required to attend the meeting in central London because of "overriding demands for his time".

Bentley added in the statement:"I made no mention of any merger between House of Fraser and Debenhams, nor did I intend my answer to infer that".

Sports Direct chairman Keith Hellawell has said he will step down from the company, ending a controversial nine-year tenure in the role.

"I have enjoyed the challenges of Sports Direct and the support of Mike Ashley, many major investors, members of the board and senior staff and wish them much success for the future".

He will be replaced by the former Nike executive David Daly with immediate effect.

ISS said investors should not support the re-election of both Mr Ashley and Mr Hellawell due to the firm's "apparent unwillingness to fully address the concerns of independent shareholders". Almost 37% of independent shareholders who voted, wanted to block his reappointment. In the event, he did attend, but did not speak and went into a meeting room as soon as the official proceedings were over.

Three shareholder advisory groups - Pensions & Investment Research Consultants (Pirc), Institutional Shareholder Services and Glass Lewis & Co - had urged investors to vote against the re-election of Ashley and Hellawell.

Mike Ashley, founder and majority shareholder of sportwear retailer Sports Direct, leads journalists on a factory tour at the company's headquarters in Shirebrook, Britain, September 7, 2016.

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