Mike Ashley bets on Debenhams as Newcastle demoted

Sports Direct founder Mike Ashley has extended his bet on department store Debenhams after another of his punts, Newcastle United, was ejected from top-flight football.

Sports Direct has extended a put option to buy over 129 million shares, or a 10.5% stake, in Debenhams for one year in a complex transaction, effectively a bet that Debenhams’ share price will rise.

The deal, done via Goldman Sachs, follows a near-10% rally in Debenhams shares this year since news of downbeat Christmas trading elsewhere hit the sector.

The firm, which has concessions in Debenhams stores, said the move “reiterates its intention to be a supportive stakeholder in Debenhams”.

It comes after Ashley warned earlier this year that the sporting goods chain was “in trouble” and a high-profile spat with MPs over a Commons committee hearing about working conditions.

Last night Ashley watched rivals Sunderland win, meaning Newcastle, the “most expensive Premier League flop ever”, were relegated.