Department store chain Debenhams has entered into a pre-pack administration and been taken over by its lenders.

The move allows the struggling business access to new funds to keep it afloat and comes after an eleventh hour £200m offer by Mike Ashley’s Sports Direct – which owned 30% of the business – was rejected.

It will see stores continuing to trade as normal for now – though dozens are already facing closure – but shareholders including Sports Direct will be wiped out.

The process saw administrators at FTI Consulting appointed before immediately selling Debenhams for £101.8m, together with debts worth £520m plus the company’s pension obligations.

Debenhams has 166 UK stores and employs more than 25,000 people. Its new owners include hedge funds led by Silver Point.

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