Frasers Group is seeking approval for majority shareholder Mike Ashley to cash in £585m of shares, which could be bought back by the company in a private deal.
The Sports Direct owner said it wanted permission to buy back the shares privately from Ashley through one or more transactions at the market price at the time, The Guardian reported.
The listed retail group said its directors “will only exercise the power to conduct off-market purchases if they conclude at the relevant time it is in the best interests of the company and its shareholders as a whole”.
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Ashley, the founder of Frasers Group’s Sports Direct chain, is the company’s largest shareholder with a 73% stake.
While the retail entrepreneur could sell a 15% stake in the firm, the proposed buyback scheme would lead to the cancellation of 67.5m shares.
This would result in a fall in the number of shares in issue meaning that, if all are bought privately by Frasers, Ashley would not only receive a cash payout but his stake would only reduce to 68%.
The group, which is seeking approval from its shareholders at its upcoming AGM next month, is also said to have filed a request to acquire more shares in Hugo Boss.
The German competition authority is understood to have received the request from the brand’s second largest shareholder last week and now has one month to assess the plans, Reuters reported.
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