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Ex-Merrill banker loses $20 million bonus claim against Sports Direct's Ashley

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Ex-Merrill banker loses $20 million bonus claim against Sports Direct's Ashley

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By James Davey LONDON (Reuters) – A former Merrill Lynch banker on Wednesday lost his claim that Mike Ashley, founder and boss of British retailer Sports Direct, promised him a 15 million pound bonus during a heavy drinking session. Jeffrey Blue alleged that Ashley pledged during a meeting at the Horse & Groom, a pub close to Sports Direct’s central London office, in January 2013 to pay him the bonus if he could double Sports Direct’s share price to 8 pounds within three years. Sports Direct’s <SPD.L> shares, which were listed at 3 pounds in 2007, rose above 8 pounds in February 2014, but Blue said Ashley reneged on their deal, paying him 1 million pounds. But Justice Leggatt ruled against Blue on Wednesday, saying Ashley’s offer was part of “a jocular conversation”. “No reasonable person present in the Horse & Groom… would have thought that the offer to pay Blue 15 million pounds was serious and was intended to create a contract,” he said. He ruled that no one present in the pub, including Blue, thought so at the time and they had all thought it was a joke. “The fact that Blue has since convinced himself that the offer was a serious one, and that a legally binding agreement was made, shows only that the human capacity for wishful thinking knows few bounds,” Leggatt said in his ruling. Sports Direct’s Ashley, who also owns Newcastle United football club, gave evidence during the case which was littered with lurid tales of boozy business meetings. Ashley had told the court he was trying to get drunk during the evening of the January 2013 meeting at the Horse & Groom and had consumed four or five pints of beer in the first hour. Blue, in his evidence, said that at another meeting at a pub close to Sports Direct’s Shirebrook headquarters in central England, Ashley had challenged a financial analyst to a drinking competition and ended up vomiting into a fireplace. Sports Direct, which has been heavily criticised for its treatment of workers and poor corporate governance, last week reported a 29 percent fall in full-year earnings. Its shares were trading at 361 pence at 1321 GMT. “The only reason the Sports Direct share price exceeded 8 pounds and will hopefully do so again, is because of the sterling efforts of all the people who work at Sports Direct,” Ashley said in response to the ruling. Blue could not be immediately reached for comment.

(Reporting by James Davey; editing by Alexander Smith)
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