England forward Michael Owen is one of Newcastle's top stars

The offer came after the retail entrepreneur said he had bought a 41.6% stake in the Premiership team from Sir John Hall's family for more than �55m.

Newcastle have been trying to improve their position in the Premiership and fans have been getting increasingly frustrated with the team's performance.

Sam Allardyce recently replaced Glenn Roeder as manager of the club.

It was the third managerial change the Magpies have undergone in less than three years.

Mr Ashley, 42, is now said to be the UK's 25th wealthiest person Profile: Mike Ashley

This season the club finished just five points above the relegation zone, having set a target of a European spot at the start of the campaign.

The club has a rich history, having won the FA Cup on six occasions and the league title four times, but it has failed to win any major silverware for 38 years.

If Mr Ashley completes his takeover then he will be one of a number of large investors who have been buying stakes in English and Scottish football clubs - that have included Manchester United, Liverpool, Aston Villa and West Ham.

Manchester City are currently involved in talks with a number of suitors, believed to include Thailand's former prime minister Thaksin Shinawatra.

'Wonderful heritage'

Mr Ashley said his firm St James Holdings Limited (SJHL) had bought 55.3 million shares in the club at 100 pence a share.

He added that his offer priced the rest of the club's shares at the same level.

Under stock exchange rules, Mr Ashley's company now has to make a cash offer for the remaining shares - a stake of around 29.8% belonging to chairman Freddy Shepherd.

Earlier this year Mr Ashley earned himself more than �900m after the flotation of his Sports Direct retail chain which he set up in 1982.

The group runs the Sports World retail chain and Lillywhites, and its brands include Dunlop, Kangol and Karrimor.

SJHL - which was set up specifically for the takeover by Mr Ashley - added that the offer price represented a 19% premium on the 84p closing price of Newcastle's shares on Tuesday 22 May.

"Newcastle United has a wonderful heritage and the passion of its fans is legendary," Mr Ashley said in a statement.

"I am sure that, like me, they are already excited about the prospects for next season under the new manager's stewardship."

Bid target

Mr Ashley's approach is not the first to target the club.

Last year the Belgravia Group investment fund said it was considering a bid - but then dropped its plans in January, saying it had failed to agree a price and transaction structure.

Meanwhile, in December last year, hedge fund Polygon tried to take over the club, but pulled out of negotiations a month later.

In October 2006, Newcastle United announced a �12m financial annual loss after heavy investment in players and a fall in revenues due to its failure to qualify for Europe.