Market Tracker weekly bulletin – 4 April 2019

Market Tracker weekly bulletin – 4 April 2019

A round up of key developments in corporate transactions covered by Lexis®PSL Corporate and Market Tracker this week, including an update on Sports Direct’s possible offer for Debenhams and a look at further issues on AIM and the Main Market by transaction type.

Takeovers

Sports Direct continues retail rescue mission

On 25 March 2019  Sports Direct International plc (Sports Direct) announced that it was considering a possible offer for the entire issued and to be issued share capital of Debenhams plc.  Sports Direct is emerging as an active bidder in the retail industry, and the possible acquisition follows a string of high-profile transactions involving the company, including its acquisitions of House of Fraser, Evans Cycle, HMV, Patisserie Valerie and Findel plc (Findel), and a recent bid to rescue struggling fashion retailer LK Bennett.

The possible acquisition of Debenhams comes after media speculation on Debenhams’ refinancing and restructuring. Sports Direct offered to assist Debenhams in its short-term liquidity requirements by acquiring Magasin Du Nord, Debenhams' Danish business, for £100 million in cash. Debenhams had announced the sale of Magasin Du Nord in 2018. Sports Direct proposed a 12-month option to enable Debenhams to purchase back Magasin Du Nord at the price at which it was sold to Sports Direct. It was also proposed that Debenhams would have the right to continue to market the business and would gain the benefit from any uplift above the initial sale consideration if sold to a third party within the 12-month option period.

Debenhams noted the possible offer and confirmed that it will consider a firm offer if made by Sports Direct provided that it includes the following:

  • An offer price, form of consideration and any other terms of such possible offer
  • a clear plan of how Debenhams' existing debt - which will fall due on any change of control - will be repaid; and
  • a proposal that addresses the immediate funding requirements of the business.

Debenhams

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Market Tracker is a unique service for corporate lawyers housed within Lexis®PSL Corporate. It features a powerful transaction data analysis tool for accessing, analysing and comparing the specific features of corporate transactions, with a comprehensive and searchable library of deal documentation across 14 different deal types. The Market Tracker product also includes news and analysis of key corporate deals and activity and in-depth analysis of recent trends in corporate transactions.