Ashley is told to put up or shut up on Blacks bid by April Fools' Day

Mike Ashley's Sports Direct has until 1 April to make a firm offer for Blacks Leisure after the outdoor and camping specialist rejected the group's latest £26.4m approach as "wholly inadequate" yesterday.

Shares in Blacks Leisure, which runs the Blacks and Millets chains, closed 0.5p higher at 61p after it snubbed Mr Ashley's 62p-per-share indicative offer and again vowed to push ahead with an alternative fund-raising of £20.3m to "accelerate" its turnaround. This would require the support of only 50 per cent of its shareholders and could take place within weeks.

Following the rejection, the Takeover Panel gave Sports Direct – which owns 28.5 per cent of Blacks – a "put up or shut up" deadline of 5pm on 1 April to make a "firm offer" for its smaller rival or walk away. The panel said both parties had accepted the ruling but the timeframe is shorter than usual. Blacks said the 62p bid, valuing its equity at £26.4m, represented a premium of just 3.33 per cent to Tuesday's closing price. Market sources said some Blacks shareholders had indicated they would only consider a bid per share of £1 or more.

Blacks said: "The board is of the view that, having blocked the proposed fund-raising despite being offered full pre-emptive participation in it, Sports Direct is now attempting to transfer that potential shareholder value from shareholders to Sports Direct."

Louise Richardson, an analyst at Arden Partners, said: "We don't think this is a serious bid ... Mr Ashley [was] obviously slightly outmanoeuvred with the alternative fund-raising by Blacks."

Sports Direct seized back its 28.5 per cent stake in Blacks from the administrator acting for Kaupthing Singer & Friedlander, the UK arm of the collapsed Icelandic bank, in the first week of March. This enabled Sports Direct, founded by Mr Ashley, to block the original £20.3m fund-raising that Blacks had intended to put to shareholders in the same week.

Some suppliers, including North Face, have reportedly indicated they will stop supplying Blacks if it is acquired by Sports Direct. Mr Ashley's group said it was "disappointed" that Blacks, which has 313 stores, had not recommended the non-binding offer.

It pointed out that the indicative offer represented a 21 per cent premium to the closing price of Blacks' shares on 1 March, a day before Sports Direct said it was considering an offer.

Sports Direct said the 62p offer was also a 14.8 per cent premium to the subscription price of 54p for Blacks' previously announced placing and open offer. If Mr Ashley does not table an offer by 1 April, he will be unable to make an approach for six months, unless another bid emerges.