UK: Sports Direct urges OFT probe after Blacks sale
Sports Direct was the largest shareholder in Blacks prior to the company’s pre-pack administration, announced yesterday (9 January), and made a failed bid to acquire the business in 2010.
The company said the appointment of administrators and subsequent sale of Blacks to JD Sports was “disappointing”, and said the total share value written off as a result of the deal was GBP52.6m (US$81.5m).
“However, despite this, it is important to note that this will have no impact on our previous guidance for the business achieving our underlying EBITDA bonus share scheme target,” Sports Direct said.
“Even before yesterday’s announcement by Blacks, it had become clear that there was no value left in the Blacks shares that we held.”
The company added that it had “looked closely” at the Blacks business when the owner of the Blacks and Millets retail chains put itself up for sale in December.
“However, given supplier relationship issues that remain, such as The North Face who were not prepared to respond to our approaches, we could not justify a higher price for the Blacks business.
“Going forward, we would urge the OFT to look closely at both the outdoor and sports retail markets to ensure they operate in the best interests of the consumer.”
JD Sports spent GBP20m to acquire Blacks from the administrators, and has said that it will retain the current senior management team, but is set to close a number of under-performing stores.
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