Newcastle United owner Mike Ashley wins court battle over Sports Direct share deal 'struck in pub'

Mike Ashley has won his High Court battle over an alleged 15million debt. Pic: PA.
Mike Ashley has won his High Court battle over an alleged 15million debt. Pic: PA.
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Newcastle United owner and Sports Direct boss Mike Ashley has won a High Court battle over a £15million deal allegedly made in a London pub.

Investment banker Jeffrey Blue told a judge that Mr Ashley promised to pay him £15million if he used his expertise to double Sports Direct's share price to £8 a share.

He said Mr Ashley paid only £1million and he wanted £14million damages.

Mr Ashley denied the claim, and said Mr Blue was talking ''nonsense''.

Mr Justice Leggatt analysed evidence at a High Court trial in London earlier this month.

The judge heard that the dispute centred on a conversation in the Horse and Groom pub four years ago.

Ruling in Mr Ashley's favour on Wednesday, the judge said no-one would have thought what was said in the pub was "serious".

Mr Ashley was not in court to hear the judge deliver his ruling, but his lawyers said he had won a "comprehensive" victory.

He said he had met Mr Blue and three other finance specialists at the pub and ''consumed a lot of alcohol''.

''I can't remember the details of the conversations that we had in the pub as it was a heavy night of drinking,'' Mr Ashley had said.

''I do remember that we had a lot of drinks and a lot of banter.

''If I did say to Mr Blue that I would pay him £15million if he could increase (Sports Direct's) share price to £8, it would be obvious to everyone, including Mr Blue, that I wasn't being serious.''

He said he paid Mr Blue, who he called ''Jeffers'', £1million for ''other deals'' unrelated to the night in the Horse and Groom.

Mr Blue told the judge that Mr Ashley was a ''serious businessman''.

He said the work ethic at Sports Direct was ''like nothing else I have ever seen''.

But he said Mr Ashley sometimes did business ''in unorthodox ways and in unusual venues''.

He told how Mr Ashley once vomited into a fireplace after a senior management meeting that was ''effectively a pub lock-in'' and said the businessman would take naps under tables at ''boring'' meetings.

Mr Justice Leggatt told lawyers at the end of the trial that the case had been ''a lot more interesting than some''.

In a statement issued after the ruling, Mr Ashley said: "The only reason the Sports Direct share price exceeded £8, and will hopefully do so again, is because of the sterling efforts of all the people who work at Sports Direct."

The judge said in his ruling: "The Sports Direct senior management meetings certainly show that Mr Ashley is happy to combine discussion of business matters with the consumption of alcohol.

"But there is no evidence to suggest that Mr Ashley has ever negotiated or concluded a contract at one of these meetings.

"The evening at the Horse and Groom was, in any event, a considerably less formal occasion than the senior management meetings, as there was no agenda or structure for the occasion and the conversation was largely social or general chat, rather than being specifically directed to any business subject."

Mr Justice Leggatt said he had no reason to think that either Mr Ashley or Mr Blue was "doing anything other than stating their honest belief based on their recollection of what was said".

But he said evidence based on recollection of conversations which occurred several years ago was problematic.

Lawyers told the judge that Mr Ashley had run up legal bills of £1.5 million and Mr Blue bills of "one million odd".

The judge said Mr Blue would have to pick up Mr Ashley's legal bills.

He said £600,000 would have to be paid on account within the next month.

Lawyers indicated that Mr Blue had been "assisted" by insurers in launching the litigation.