Beleaguered retailer Blacks Leisure has seen a proposed GBP20m (US$31m) share issue put under threat after its leading shareholder threatened to block the deal.

Sports Direct, owned by Mike Ashley, bought a 28.5% share in Blacks on Monday (22 February), and immediately indicated that it would block the GBP20m issue, which the Blacks board says is key to the retailer’s recovery plans.

A meeting scheduled for today (24 February) has been adjourned “for an indefinite period”, Blacks said, effectively putting the share issue on hold while talks between Blacks and Sports Direct continue.

Blacks added: “The company is currently engaged in discussions with Sports Direct in relation to the firm placing and placing and open offer. There can be no guarantee that these discussions will reach a successful conclusion.”

Ashley and Sports Direct were widely reported to have been in talks to acquire a controlling stake in Blacks last year, but negotiations collapsed without agreement.

Any failure of the GBP20m share issue could enable Ashley to revive his interest in the company, which would have to seek alternative sources of investment.