Debenhams is on the brink of administration after it rejected a new offer from Sports Direct, made in the early hours of Tuesday, to pump £200m into the department store.
Its shares were suspended just before the start of Tuesday’s trading, after a request from the company.
On Monday, Debenhams turned down a similar proposal from Mike Ashley’s company to put £150m into the retailer.
The new offer was rejected because Mr Ashley wanted to be chief executive.
The new offer from Sports Direct would have seen the company underwrite the raising of £200m by issuing new shares, higher than its previous proposal.
Debenhams is expected to go through a pre-pack administration, which would mean current shareholders would be wiped out. Among them is Mr Ashley, whose near 30% stake in the company cost about £150m to build up.
While the shops would continue trading for now, Debenhams has proposed closing around 50 branches from next year and renegotiating rents with landlords to tackle its funding problems.
Debenhams has been struggling for a while and issued three profit warnings last year. It also has a debt pile of £640m.
Towards the end of 2018, the chain announced it was increasing its store closure plans from 10 to 50 over a three to five-year period.
The company said it was not ready to release a list of which shops may be affected.
In February, it was revealed that the shutting of 20 of those stores could be brought forward if the retailer took out a company voluntary arrangement (CVA), a form of insolvency that can enable firms to seek rent cuts and close unwanted stores.
Debenhams has 165 stores and employs around 25,000 people.