Mike Ashley’s Frasers Group is seeking approval for the billionaire entrepreneur to cash in £585m of shares which could be bought back by the company in a private deal. Under the plan, the stock market-listed retail group said it wanted permission from shareholders to buy back the shares privately from Ashley – in one or several transactions – at the market price at the time. Frasers, which owns retailers and brands including House of Fraser, Sports Direct and Flannels, said its directors “will only exercise the power to conduct off-market purchases if they conclude at the relevant time it is in the best interests of the company and its shareholders as a whole”.
Ashley, the founder of Frasers Group’s core Sports Direct chain and former Newcastle United owner, is the retail group’s largest shareholder, currently holding a 73% stake. Although he could sell a 15% stake in the company, the proposed buyback scheme would result in the cancellation of 67.5m shares.
That move would lead to a fall in the number of shares in issue meaning that, if all are bought privately by Frasers, Ashley would not only receive a cash payout but his stake would only reduce to 68%. In the statement to the stock market, Frasers said: “The directors will only exercise the power to conduct off-market purchases if they conclude at the relevant time it is in the best interests of the company and its shareholders as a whole.” The statement was released late on Friday ahead of the bank hol.