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Mike Ashley takes a £1.8m punt on a Frasers Group bounceback

Mike Ashley takes a £1.8m punt on a Frasers Group bounceback after last week’s share price slump

Mike Ashley has placed a major bet on a bounceback in Frasers Group’s share price.

The 58-year-old tycoon, who has handed over the reins to son-in-law Michael Murray, made the move after watching shares slump last week.

The bet, which involved the sale of £1.8million worth of so-called put options, means he will profit if shares rise above 900p by next September.

Positive: Mike Ashley will cash in if Frasers Group’s shares top 900p by September

But former Newcastle United Football Club owner Ashley will lose out if they do not hit the milestone, having to buy hundreds of thousands of shares above their market value.

Shares are trading at 753p, falling 3.8 per cent, or 29.5p yesterday despite Ashley’s vote of confidence in his retail empire, which owns Sports Direct, Jack Wills and Flannels.

Retail analyst and consultant Nick Bubb said Ashley selling the options is ‘bullish’, but given his huge 69 per cent shareholding it is ‘a bit marginal’. He added: ‘Investors still dismiss the moves because Mike has more money than sense.’

Ashley’s move may also be seen as a further stamp of approval in Murray’s leadership.

The 33-year-old, who married Ashley’s eldest daughter Anna in May, is trying to replace cluttered stores with more upmarket outlets featuring the priciest releases from leading sporting brands such as Nike, Adidas and Under Armour.

Last week he hailed the success of the strategy, with Frasers Group’s half-year results showing a boost from younger shoppers, including at firms it has taken over such as womenswear group Missguided and online fashion store I Saw it First.

Murray said: ‘Our relationships with our brand partners are stronger than ever and consequently, we can now offer our consumers an even wider choice of brands and even better choices of product.

‘We have a clear vision to build the planet’s most admired and compelling brand ecosystem.’

Frasers bucked the doom and gloom engulfing the sector, with sales and profits jumping in the six months to October 23.

The company said yesterday that it has ‘strong momentum’ and held its full-year profit forecast at up to £500million.