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Mike Ashley, the Sports Direct tycoon who was once caught on camera downing a pint of beer in less than 15 seconds, is facing a £14m lawsuit over a business deal allegedly struck during a night of drinking in a London pub.
The legal claim, which will be the subject of a High Court hearing on Monday, stems from a 2013 conversation in which the billionaire retailer allegedly promised to pay former investment banker Jeff Blue £15m if he could double the Sports Direct share price to £8 within three years.
The meeting was arranged by Mr Blue and attended by Mr Ashley. It took place less than half a mile away from Sports Direct’s Oxford Street store, in the Horse and Groom pub in Marylebone.
Mr Blue had also invited executives from Espirito Santo, the Portuguese banking group, which he was hoping to persuade to act as Sports Direct’s broker.
“What should I do to incentivise Jeff?”, Mr Ashley asked those present, according to Mr Blue’s account of the meeting.
The former banker claims that Mr Ashley “said words the effect of which was . . . if he can get the stock to £8 per share why should I give a f*** how much I have to pay him, as I will have made so much money it doesn’t matter”.
Mr Blue says the billionaire eventually agreed to pay £15m if he could hit the share price target, which he calculated would increase the value of Mr Ashley’s stake in Sports Direct by more than £1.6bn.
He says he should have received a multimillion-pound cheque in February 2014, when Sports Direct’s shares closed above £8 for the first time, and alleges that £14m remains outstanding.
In his amended defence, Mr Ashley calls Mr Blue’s allegations “extremely vague”.
“A considerable amount of alcohol was drunk in the pub which led to ‘banter’ on numerous topics including [Sports Direct]’s future, Newcastle United and other current affairs,” the defence says.
Mr Ashley denies that any agreement was made.
Instead, he says Mr Blue approached him in May 2014 and asked for a bonus to reflect his contribution for his work on a Sports Direct share scheme. Mr Blue initially suggested £1.5m, but Mr Ashley says he considered that “too high” and instead offered Mr Blue a discretionary bonus of £1m.
Mr Ashley claims he offered to document this, but that Mr Blue said there was no need for documentation. The Sports Direct founder also denies that a £1m transfer he made to Mr Blue in May 2014 was ever a part payment of any remuneration under the alleged Horse and Groom deal.
Mr Ashley, who also owns Newcastle United football club, received “words of advice” from police in 2008 after cameras recorded him swallowing a pint of beer in less than 15 seconds in the stands at Arsenal’s Emirates Stadium, where the consumption of alcohol is banned.
A spokesperson for the club later explained that Mr Ashley had been under the impression that the beer in question was alcohol free.