Mike Ashley's Sports Direct makes £43m bet on Tesco

Mike Ashley, the sportswear tycoon, has made a bet on shares in troubled supermarket group Tesco.

His company Sports Direct has entered into a put option with Goldman Sachs over 23m shares in Britain's biggest retailer, the equivalent of 0.3pc stake. The group's maximum exposure to the grocer is about £43m, the sportswear retailer said in a filing to the stock exchange on Thursday.

"This investment reflects Sports Direct's growing relationship with Tesco and belief in Tesco's long-term future," the company said.

If Tesco shares fall below a certain price - the so-called "exercise price", the retailer can either settle the put by buying Tesco shares at the agreed level or pay the difference in cash.

However, Sports Direct will receive a premium if Tesco shares are above the exercise price when the put expires.

The Newcastle United owner made a similar bet on Debenhams shares earlier this year. In January, Sports Direct bought a 4.6pc stake in the department store group only to then promptly sell it, while at the same time entering a put option over 81.2m Debenhams shares.

The new investment by Mr Ashley is the latest twist in a dificult week for Tesco.The grocer on Monday disclosed that it had overstated its first-half profit guidance by £250m, a revelation that sent its shares tumbling to the lowest level since 2003.

Tesco could be forced to restate past accounts after the Financial Reporting Council on Wednesday confirmed it is monitoring events at Britain's biggest retailer.

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