Sports Direct is holding firm on offer

Sports Direct is holding firm on offer

Outdoor retailer Blacks Leisure Group has rejected a takeover offer from rival Sports Direct, describing the GBP26.4m (US$40m) bid as “wholly inadequate”.

Sports Direct, which already holds a 28.5% stake in Blacks, made the indicative, non-binding offer of 62 pence a share earlier this week, Blacks revealed.

The Blacks board has firmly rejected the bid, claiming that a fund-raising offer due to be made on 25 February would have led to a “substantial increase” in shareholder value – but was blocked by Sports Direct as the company’s largest shareholder.

“Sports Direct is now attempting to transfer that potential shareholder value from shareholders to Sports Direct,” Blacks said.

The company is now planning to pursue a further fund-raising offer, subject to the approval of a simple majority of shareholders – which means that Sports Direct would not be able to block it.

Responding, Sports Direct took issue with Blacks’ claim that the offer represented only a 3.33% premium to Blacks’ closing share price just prior to the making of the bid.

Instead, it claimed the offer represented a premium of 21% to the closing price on 1 March, just before Sports Direct revealed its possible interest in mounting a takeover bid.

The company, owned by Mike Ashley, said it was “disappointed” with Blacks’ rejection of its offer.

“[Sports Direct] continues to hope that the board will recognise the merits of an offer which, if made, it believes would be highly attractive for Blacks shareholders,” it said.