Mike Ashley, the billionaire owners of Sports Direct International PLC (LON:SPD), has dismissed claims that he agreed to pay one of his former advisors £15mln on a night out as “nonsense”.
The 52-year-old is being sued by investment banker Jeff Blue, who claims the sportswear tycoon agreed to pay him the multi-million pound bonus if Sports Direct’s shares doubled in value within three years.
Today, Ashley told the High Court that if he did make such an offer, it would have been just “drunk banter” during a “heavy night of drinking” at the Horse & Groom pub in Fitzrovia back in 2013.
The billionaire, who also owns Newcastle United, added that he wouldn’t be able to sanction such an agreement on his own as he is “not Obi Wan Kenobi in charge of the Death Star”.
‘Drunk banter’
“I find it incredible that Mr Blue is actually suggesting that I made a binding agreement for £15 million. It's nonsense,” Ashley said under cross-examination.
“If I did say to Mr Blue that I would pay him £15 million if he could increase [Sports Direct’s] share price to £8, it would be obvious to everyone, including Mr Blue, that I wasn't being serious.”
Ashley added that during that night out he offered one of the other members of the group a senior role at Newcastle United which was intended and taken as “banter”.
“I think that this shows how ludicrous it is that Mr Blue by contrast claims that we had a serious conversation that evening about a bonus for him.”
‘Ashley has meetings over drinks all the time’
The case being put forward by the prosecution is that Ashley often conducts serious meetings in pubs and casinos and that the fact this deal was agreed over drinks should invalidate the alleged agreement.
In a witness statement released on Monday, Blue said Ashley on one occasion threw up into a fireplace after a drinking game with a junior member of staff.
“After approximately 12 pints and chasers Pawel [Pawlowski] apologised profusely and had to excuse himself,” Blue said.
“Mr Ashley then vomited into the fireplace located in the centre of the bar, to huge applause from his senior management team.”
The Sports Direct boss and founder fired back saying that he does hold business discussions in “informal environments from time to time”, but that it only happens when a deal is near completion.
“I don't just get to turn up to a venue with someone and negotiate a binding agreement in a few hours over drinks,” Ashley said.
“If I meet someone in an informal environment to have business discussions with a view to entering into an agreement, it would usually be at the point when the majority of commercial terms have already been negotiated over a period of time by colleagues and/or advisors.”
The trial continues.
Sports Direct shares were up 0.5% to 295p shortly before close on Thursday.