Blacks and Ashley trade blows ahead of deadline

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The Independent Online

The war of words between Blacks Leisure and the entrepreneur Mike Ashley intensified yesterday, as the outdoor and camping specialist denied allegations that it had broken takeover rules ahead of Thursday's deadline for Sports Direct to make a firm bid.

The group, which operates the Blacks and Millets chains, confirmed it had received a letter on Friday indicating that Sports Direct was "giving serious consideration to a material increase" to its indicative offer priced at 62p a share earlier this month.

Mr Ashley, who also owns Newcastle United Football Club, is the founder and deputy executive chairman of Sports Direct. Shares in Blacks Leisure surged by 7.5p to 70.5p yesterday, giving the business a market capitalisation of £44.86m.

In a further sign of souring relations between the two parties, Sports Direct's letter also alleged that Blacks had been "selectively disclosing information" about suppliers who were "unlikely" to supply the outdoor retailer if it fell under Mr Ashley's control.

Sports Direct, which owns 28.5 per cent of Blacks Leisure, threatened to report this matter to the Takeover Panel if information on these suppliers was not received by 3pm on Friday.

But Blacks, which only received the letter about 1pm on that day, stressed there had been no such disclosures in breach of the takeover code and immediately referred the letter to the panel.

Sports Direct said yesterday it was "continuing to evaluate its position".

North Face, the outdoor clothing brand, is one of the suppliers who have reportedly threatened to boycott Blacks Leisure if Mr Ashley succeeds in getting his hands on it.

It is thought that North Face has cited the weak performance of Field & Trek, another outdoor retailer, which suffered falling sales and a loss of £2m in the first full financial year after it was acquired by Sports Direct in 2007.

North Face is believed to have concerns that its brand integrity could be tarnished if it fell under the ownership of the discount retailer Sports Direct.

Blacks Leisure also reaffirmed its plans to press ahead with an alternative fund-raising for £20.3m, which would only need the support of 50 per cent of shareholders and can proceed without the approval of Sports Direct. The move is seen as cocking a snook at Mr Ashley, who vetoed the initial fund-raising vote scheduled for the first week of March.

Blacks Leisure would use the funds to refurbish existing stores, open new outlets and pay down debt. The Takeover Panel has given Sports Direct a deadline of 5pm on 1 April to make a "firm bid" for Blacks.

The outdoor retailer rejected as "wholly inadequate" Sports Direct's indicative offer of 62p, which valued Blacks' equity at £26.4m.

A market source said that Blacks' shareholders would have to consider a bid of about 75p a share. But it is thought that some are holding out for as much as £1 or above, given that Blacks is a recovery play after an insolvency procedure saved it from collapse last year.