Shares in Debenhams plunged on Thursday after Sports Direct International PLC (LON:SPD) said it did not intend to make an offer to acquire struggling department store group Debenhams PLC (LON:DEB).
Sports Direct issued the statement after Debenhams shares surged on Wednesday following reports that the sporting goods retailer led by Mike Ashley had discussed merging Debenhams with its House of Fraser business at the board level.
READ: Debenhams shares jump on House of Fraser merger speculation
However, in a statement issued after market-close on Wednesday, Sports Direct said: "It does not intend to make an offer to acquire the entire issued and to be issued ordinary share capital of Debenhams."
Speculation mounted on Wednesday that Sports Direct was considering a bid for the embattled department store group after comments made by Simon Bentley - one of its non-executive directors - to journalists present at Sports Direct’s Annual General Meeting (AGM).
Bentley told journalists on the sidelines of the AGM that combining the two department stores “had been discussed” at board level, according to the BBC.
"If any of you had the job of handling House of Fraser right now, I think you might have your hands full, and incidentally we've also got Sports Direct. If there's opportunities in the future, then we'll be in a position to take advantage of them,” Bentley was quoted as saying by the BBC.
Shares in Debenhams were 8% down at 12.34p in mid-morning trade. However, Debenhams is not the only retail stock on the retreat following John Lewis' first-half results in which it posted a near 99% slump and said it expected full-year profit to be "substantially lower" than last year.