Sports Direct takes another swipe at Debenhams in share buyback

 
Sebastian McCarthy
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Sports Direct said that the board of Debenhams 'ignored the wishes of shareholders' (Source: Getty)

Sports Direct took a further swipe at Debenhams this morning amid growing speculation that Mike Ashley is mulling legal action to remove the retailer’s current administrators.


Read more: Mike Ashley considers legal action against Debenhams

In a note to the London Stock Exchange the sportswear group announced a new share buyback programme, which it said was "an important mechanism for maintaining an efficient but robust balance sheet for the benefit of our shareholders, whose support, including during the Debenhams refinancing process, we continue to appreciate".

Hitting out at the board of Debenhams, Sports Direct said: "Our understanding of the importance of our shareholders and our actions towards them are in complete contrast to the actions of the board of Debenhams, past and present, whereby they ignored the wishes of shareholders, both major and minor, and offers of support, and completely destroyed shareholder value."

It is the latest in a series of criticisms made by Sports Direct owner Mike Ashley since the embattled retailer moved into administration earlier this week, wiping out the tycoon’s near 30 per cent stake in the business.


Yesterday Sports Direct doubled down on its calls for the administration of Debenhams to be reversed, as it mulls potential legal action following Mike Ashley’s failed bid to take control of the retail chain.

Lawyers from the sportswear retailer said that the appointment of administrators and the subsequent pre-pack administration only happened because Ashley’s own rescue proposals "were not engaged with".

The group also said that while any administrator appointed had a duty "to investigate why those proposals were not engaged with", the current administrators FTI Consulting are “conflicted”.

Read more: Mike Ashley could use a lesson in subtlety after Debenhams

In a letter to the firm’s administrators today, legal representatives of Sports Direct (SDI) said: "SDI will do everything available to it to unwind the damage caused to the company and other stakeholders (including large and small shareholders) by the events of today including but not limited to challenging the appointment and all consequences of it."

They added: "SDI has today called in the press for the administration, and its consequences, to be reversed. We are asked to repeat and reiterate that call to you now."

In response the joint administrators have said: "We understand that Sports Direct as a shareholder will be disappointed that there is no value in the equity. However the transaction delivers continuity for all group operations and was in the best interests of the group’s creditors, employees, customers, pension holders and suppliers. The underlying group operating companies are unaffected and continue to trade as normal."