Sports Direct takes £43 million bet on Tesco shares

The sportswear retailer has entered into a put option for 23 million of Tesco’s shares

Mike Ashley’s Sports Direct has taken a bet that beleaguered grocery giant Tesco’s shares will improve.

The sportswear retailer has entered into a put option for 23 million of Tesco’s shares with Goldman Sachs – which is equivalent to a 0.28% stake in Tesco.

The option is worth up to £43 million and comes at heightened point for Tesco, which this week revealed a £250 million hole in its profit forecasts and that it has been without a full-time finance chief for five months.

Adrian Bailey, the chairman of the Parliamentary Business Committee today told the BBC, Tesco’s accounting error was “unbelievable”.

Sports Direct’s investment could be seen as backing for new chief executive Dave Lewis. The two retailers have reportedly been working together to install Sports Direct stock and concessions in Tesco shops.

Sports Direct said today: “This investment reflects Sports Direct's growing relationship with Tesco and belief in Tesco's long-term future.”

The move to buy up Tesco shares echoes a similar situation earlier this year when Newcastle United owner Ashley took a 4.6% stake in Debenhams before promptly selling it.