LONDON (Reuters) - Sports Direct (LON:SPD) boss Mike Ashley battled to take control of Debenhams on Monday just hours before it was due to fall into the hands of lenders, offering to underwrite a rescue plan while picking another fight with its board.
Debenhams, once Britain's biggest department store, has been fighting for its future after its sales plunged, prompting Ashley to buy almost 30 percent of the company before he sought to take full control of the group with either a takeover or an underwritten rights issue.
On Monday Sports Direct said it would underwrite a 150 million pound ($196 million) rights issue at Debenhams in exchange for the CEO role for Ashley and the agreement of lenders to write off 148 million pounds of debt.
The two companies have been at loggerheads for months, compounded by Ashley's move in January to force Chief Executive Sergio Bucher off the board, and the chairman out of the company, at its annual meeting.
If it cannot agree a rescue deal its lenders will take control of the company later on Monday. Despite that looming deadline Debenhams does not trust the billionaire Ashley to stump up the cash and the two sides have clashed over what should happen next.
Sports Direct said over the weekend that Debenhams and its advisors had undertaken a "sustained program of falsehoods and denials" and called on its board members Terry Duddy and David Adams to take a lie detector test.
The company said that Ashley had taken his own lie detector test, after the two companies clashed about events in a meeting, and said: "Mike Ashley's score for example was so significantly high as to be considered rare in comparison to others".
Sports Direct said it was also considering its options after it made a 61 million pound offer for Debenhams at the end of March. The group has until April 22 to either make a firm offer or walk away.
A spokesman for Debenhams declined to comment. Were the company to fall into the hands of its lenders its stores should continue operating as normal while its lenders try to find a solution for the group.