National department store chain Debenhams has been sold, but not to Mike Ashley. Despite making several attempts to lend it money or fund it in return for having himself declared CEO, all of Ashley's efforts were turned down in favour of selling the assets of the shop to its basket of lenders.
This resulted in a well foreshadowed pre-pack administration being put into place yesterday, where the main business PLC operations of Debenhams were handed over to its banker backers in return for them writing off vast chunks of debt.
One unfortunate side effect of this is that the investments of shareholders are wiped out in the process, leaving many small shareholders – and one massive one – out of pocket. The one massive shareholder is Mike Ashley, who spent around £150m on buying Debenhams shares through his Sports Direct chain over the last couple of years, building up a near-30 per cent holding, and is therefore not happy about the apparent stitch-up that is the pre-pack admin sale.
Ashley thinks the business has been stolen from small shareholders, and said: "The board of Debenhams and its advisers have sought to stifle and exclude us from their so-called process and have undermined and blocked our various offers of assistance as they carried out their underhand plan to steal from shareholders."
He added: "This is nothing short of a national scandal – and one that could so easily have been avoided if Debenhams had chosen to engage with its largest shareholders constructively rather than obstructively." [BBC]