Sports Direct shares hit after Mike Ashley sells £200m stake

Shares in Sports Direct fell more than 10 per cent in morning trading after owner Mike Ashley sold £200m worth of shares.

Shares in Sports Direct fell 96p to 797½p after the announcement of Mr Ashley's sale, and subsequent placing by Goldman Sachs. Last week, the shares reached a high of 900p per share.

The sale by Mr Ashley's investment vehicle comes just days after his intervention in the sale of House of Fraser to Chinese conglomerate Sanpower. The maverick retailer and football club owner, who controls FTSE 100 sportswear chain Sports Direct, snapped up an 11 per cent stake in House of Fraser from Scottish businessman and philanthropist Sir Tom Hunter.

People close to the situation said the share sale was not linked to Mr Ashley's interest in House of Fraser, where the stake had been bought through Sports Direct.

The sale, representing 4 per cent of Sports Direct's issued share capital, also comes a week after City institutions blocked the retailer's plan to award Mr Ashley, who does not take a salary or claim expenses, more than £70m in shares.

Despite Mr Ashley's intervention, Sanpower said on Tuesday it would buy an 89 per cent stake in House of Fraser, the 165-year-old department store chain.

Nanjing Xinjiekou, Sanpower's retail arm, said in a statement issued on the Shanghai Stock Exchange that it had completed talks to acquire the stake in Highland Group.

The Chinese company said it planned to set up a British arm for the acquisition, which would be paid in cash, with its own capital and debt. Its board had also approved the stake purchase plan.

Mr Ashley considered acquiring House of Fraser two years ago but has since turned his attention to Debenhams.

Sanpower's acquisition of the stake in House of Fraser represents the biggest Chinese investment to date in a British retailer.

For House of Fraser, which has 61 stores in the UK and Ireland, it ends a two-year search for a buyer. The chain has previously held talks with Qatari investors and French rival Galeries Lafayette.

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