The founder of UK sportswear retailer Sports Direct, Mike Ashley, is
reportedly being sued over an offer made with an investment banker in 2013,
according to news reports. Former Merrill Lynch banker Jeff Blue, is said
to have made the deal with billionaire Ashley over drinks in a London pub
which would see Ashley pay the banker 15 million pounds if he could get the
company off the City’s ‘blacklist’ and double the share price of Sports
Direct within three years.
The billionaire reportedly agreed to pay Blue if he managed increase the
company’s share price from 4 pounds to 8 pounds, a move which see Ashley’s
vast fortune increase once more as he own more than half of Sports Direct.
Ashley is said to have initially offered the banker 10 million pounds, but
agreed to raise his incentive to 15 million pounds after Blue stressed a
share price of 8 pounds was a “high target.”
According to court documents seen by the Times, three bankers from
investment bank Espirito Santo were also said to have been present, with
suggesting that a fee of 20 million pounds would be appropriate. Sports
Direct shares went on to close at 808.5 p on February 25, 2014 after
several institutional investors purchased shares, which should have
prompted the payment.
However, court documents state that Ashley claims he had consumed a “a
considerable amount of alcohol” that night and any conversation made was
just “banter.” As Ashley denies knowledge of any deal being made, Blue is
said to be suing him for 14 million pounds, 1 million less as the Sports
Direct founder paid him 1 million pounds in May 2014. Although, this sum is
said to have been a reward to Blue for helping Ashley get investors as the
banker was head of mergers and acquisitions at Sports Direct, but left his
position in February 2015.