Sports Direct International has extended its Debenhams put option by a year – meaning shareholders in Mike Ashley's retailer will continue to be concerned with the fate of the department store, whether they like it or not.
Sports Direct entered into the original agreement with Goldman Sachs in 2014. The stake was built up to 16.6 per cent, but some of the options have expired and the current agreement now relates to 10.5 per cent.
"Sports Direct reiterates its intention to be a supportive stakeholder in Debenhams and to create value in the interests of both Sports Direct's and Debenhams' shareholders," the company said this morning.
Sports Direct had taken a similar punt on Tesco, but as of today the Debenhams agreement is "the only remaining put option that the group is a party to that relates to shares in other listed companies".
It's impossible to tell whether Sports Direct's bet on either stock has paid off so far, as the option relates to an unknown strike price.
However it was not a popular decision at the time, with analyst Louise Cooper saying at the time:
For many fund managers, this will not be what they want to buy in SPD [Sports Direct]. They want to buy a fast growing sportswear retailer and not a proprietary trader. Fund managers can buy shares in investment banks if they want exposure to that sort of business.
But as Mike Ashley owns almost 58 per cent of SPD then he can continue to treat it like his personal business. He has voting control. Other shareholders are along for the ride.
Debenhams' share price have fallen more than 20 per cent over the last year, despite a rallies on the news that chief executive Michael Sharp would be stepping down and its better-than-expected Christmas results.
Meanwhile Sports Direct's share price has tumbled 42 per cent, on a series of profit warnings and growing concern about working practices at the retailer.
Ashley has been linked with potential bids for both BHS and Austin Reed, which entered administration within a day of each other.