Sports Direct boss Mike Ashley on Monday offered to underwrite a £150 million rights issue by Debenhams in exchange for the CEO role and a pledge by lenders to write off £148 million of debt.

Ashley, who owns almost 30% of Debenhams, has already offered to buy the retailer.

If Ashley’s last-ditch battle to take control of Debenhams fails, the firm will fall into the hands of its lenders at the close of business of Monday.

It may then be put into a so-called pre-pack administration which enables stores to keep operating while its lenders try to find a solution.

Laith Khalaf, a senior analyst at Hargreaves Lansdown, told Reuters: “In theory a deal could be struck, but relations seem far from cordial, and the Debenhams management look set on giving the lenders control of the high street chain.”

“Sports Direct notes the recent press speculation regarding a proposal made by Sports Direct to underwrite a £150 million equity issuance by Debenhams plc.

Sports Direct said in a stock exchange statement: “Sports Direct wishes to confirm that it continues to seek to constructively engage with the Debenhams board and, as one of a number of potential options under consideration, it has made a proposal to Debenhams under which Sports Direct would underwrite a £150 million pre-emptive equity issuance to existing Debenhams shareholders …

“The Equity Issuance, which would form part of a comprehensive refinancing of Debenhams, is subject to a number of conditions, all of which Sports Direct believes should be deliverable with the co-operation of Debenhams and its existing lenders, including the appointment of Mr Mike Ashley as Debenhams’ CEO and Debenhams’ lenders agreeing to write-off (in aggregate) £148 million of Debenhams debt. 

“Sports Direct also wishes to confirm that, in addition to consideration of the Equity Issuance, it continues to give active consideration to its pre-conditional possible offer for Debenhams at 5p in cash per ordinary share announced on 25 March 2019 …

“Sports Direct has until 5.00pm on 22 April 2019 to announce either a firm intention to make an offer for Debenhams or that it does not intend to make an offer.

“Whilst Sports Direct continues to actively evaluate all possible options to support Debenhams, it wishes to clarify that, as a technical matter, were it to complete, the Equity Issuance would be an alternative transaction to the Possible Offer and vice versa.”