Ashley will sell £900m share of Sports Direct

Mike Ashley, the reclusive entrepreneur behind the Sports Direct chain, will sell shares worth up to £900m when his £2.2bn sports empire floats on the stockmarket later this month.

The billionaire is placing 40 per cent of the company he founded in 1982 with institutional investors. He increased the number of shares up for grabs by a third after dropping plans to load the group up with debt to pay himself a £300m dividend ahead of the initial public offer.

The group has appointed David Richardson, the former finance director of Whitbread, as its non- executive chairman to quell City fears about how it will be run. Mr Ashley, who will take the role of executive deputy chairman, is renowned for his entre-preneurial style of doing business, which analysts believe could come as a shock to investors.

The company, which also owns brands such as Karrimor, Dunlop and Slazenger, has also lined up two non-executive directors - Simon Bentley, the former chief executive of Blacks Leisure, and Chris Bulmer, the former human resources director of Brambles and Whitbread - and plans to name a third shortly.

The fact that it will have a former Blacks executive on its board will increase speculation that Sports Direct International, as the quoted company will be known, will bid for the camping specialist in which it has a 29 per cent stake. It also has a small stake in JD Sports.

Mr Ashley's decision to seek a stockmarket listing follows a strategic review by Merrill Lynch, Citigroup and Credit Suisse. Despite loathing the limelight, he opted to brave the public market because he felt it would help the group to achieve its ambitious growth plans over the next five years.

A Credit Suisse research note estimates that Sports Direct, which has stores in Belgium, Ireland, the Netherlands and Slovenia, will double its sales to almost £2bn and more than triple its pre-tax profits to £339m over the next five years. It is also tipped to double its retail space in the UK, where it has 408 stores, over the same timeframe.

Analysts at the investment bank back the company for its growth prospects but warn: "However, it is unlikely to be run as a conventional plc retailer and therefore may not appeal to all investors."

Quoted retailers run by their founders have had a mixed history. Some, such as Carphone Warehouse, which is run by Charles Dunstone, and Lord Harris' Carpetright, have performed strongly. But others, such as Matalan, which was recently taken private by its founder John Hargreaves after struggling, and DFS, where Lord Kirkham bought the company back at a price many institutional investors considered low, have proved more controversial.

The indicative price range has been set at 250p to 310p per share, which will value the group at somewhere between £1.8bn and £2.23bn. Mr Ashley's decision to drop the mooted dividend means the company will be free of debt - in stark contrast to retailers such as Debenhams that have returned to the market via private-equity owners. Analysts have queried whether the fact that same investment banks advising Sports Direct also floated Debenhams, which is trading at a discount to its float price last autumn, will count against the sports retailer.

Yesterday Mr Ashley, a former Buckinghamshire county squash coach, said he intended to deposit his cash "in the bank". He scotched reports that have linked him with a bid for Tottenham Hotspur. He denied that having so much free cash to play with would dent his motivation, adding: "I am around most days and that won't change at all."

Dave Forsey, who helped Mr Ashley to build up the group, will remain as chief executive and Bob Mellors, who joined as finance director four years ago, will continue in the same role.

In the 53 weeks to 30 April the group reported underlying earnings of £145.1m on sales of £1.19bn. It had sales of £216.6m and a gross margin of 46.8 per cent in the half year to 29 October and expects to match that progress in its second half.