Mike Ashley's Sports Direct has made a revised £200 million rescue offer for Debenhams, delaying the department store's likely administration.
The offer involves underwriting a rights issue which would see existing investors buying newly issued shares and is an advance on an £150 million plan tabled on Monday, which was rejected.
Under Mr Ashley's latest proposal, Debenhams' lenders would have to agree to write off £82million of its £720 million debt mountain, as well as install the tycoon as chief executive.
Lenders to Debenhams said the latest proposal, on the terms set out, was "not sufficient".
Debenhams said in a statement: "The board confirms that it received a revised, highly-conditional, proposal from Sports Direct in the early hours of 9 April, which indicated a willingness of Sports Direct to underwrite an equity issue of £200million.
"The company's lenders have confirmed to the company that the proposal, on the terms set out, was not sufficient to justify an extension to the 8 April deadline.
"The company anticipates making a further announcement during the course of the day following further discussions with its lenders."
Debenhams is now widely expected to fall into administration and the retailer's lenders seize control of the company in a move tipped to trigger store closures and job losses.
Shareholders such as Mr Ashley's Sports Direct, which holds a 30% stake, will see their investments wiped out.
The pre-pack administration undertaken by the struggling department store chain will see its debt reduced and comes ahead of a wider restructuring which will see around 50 stores close via a Company Voluntary Arrangement.
It will also see a £200 million refinancing plan, announced in March, go ahead.
Mr Ashley's attempts to take control of Debenhams had become increasingly desperate, and over the weekend the businessman demanded the board be investigated, two members to undergo lie detector tests and trading in its shares to be suspended.
Sports Direct added on Tuesday that it is continuing to "actively evaluate" a conventional takeover, priced at 5p per share.