Debenhams will consider a £150m loan offer from dissident shareholder Sports Direct, it said today.
The department store chain also indicated that Mike Ashley's latest push for control of the struggling British department store group is unlikely to fly.
Ashley's Sports Direct, Debenhams' biggest shareholder with close to a 30% stake, made its unsecured loan offer last night with conditions that include the appointment of Ashley as chief executive.
Debenhams has issued a string of profit warnings and lost 87% of its market value over the past year.
It said the offer would require both the consent of existing lenders and bondholders as well as "material amendments" to existing facilities.
"Nevertheless, the board will give careful consideration to the proposal and will engage with Sports Direct and other stakeholders regarding its feasibility in the interests of all parties," it said.
The loan would be interest-free if Debenhams agreed to give Sports Direct another 5% of its equity without the normal obligation to make a full takeover bid.
Without the equity, the loan would bear interest at 3%.
Debenhams rejected a £40m loan offer from Ashley in December.
His latest offer came as Debenhams works on a major restructuring that analysts expect to include a share issue and acceleration of its store closure plans.
On Monday it said it was in advanced talks with lenders for additional loans of £150m.
Analysts played down the chances of Ashley's latest manoeuvre being successful.
Ashley, one of Britain's most famous and unorthodox businessmen and owner of the Newcastle United soccer club, last week launched a coup to take charge of Debenhams.
He is seeking a shareholder meeting to remove most of its board and install himself in an executive role.
He also said he would step back from the top job at Sports Direct to do so.
Sports Direct yesterday also stepped up its criticism of Debenhams' management, publishing a letter it sent to the company on March 4, the day before the deaprtment stores group's latest profit warning, accusing it of making misleading public statements.
Sports Direct said that Debenhams' January 10 statement to the stock exchange was "at best impossibly optimistic or at worst deliberately misleading".
Debenhams said it rejected Sports Direct's complaints, describing them as unfounded and self-serving.