Blacks Leisure to be sold as investors reject cash call

As well as needing about £20m in new money, Blacks is in talks with banks over its £40m of debt

Blacks Leisure, the struggling outdoor retailing group, has been forced to put itself on the market after shareholders refused to inject more cash into the business.

The company announced yesterday that it wished to "invite offers to support further investment in the group, which is most likely to involve a sale of the company or sale of one or more of the group's brands". This came after talks with shareholders about raising investment foundered.

The shares plummeted more than 50 per cent to 1.85p as the company revealed that, with debt at £36m, "there can be no assurance that any sale would attribute value to the ordinary shares of the group".

The decision to move to what company insiders called "plan B", is likely to pave the way for a pre-pack administration. The controversial insolvency procedure allows a company to collapse and then be bought quickly by a new owner, after its debts have been wiped out.

The accounting group KPMG, which was involved in an insolvency procedure that saved Blacks two years ago, has been called in to run the sale.

The company, which also owns the Millets chain, has been desperately tapping up its shareholders to raise additional cash. Analysts put the figure at about £20m, although Blacks has declined to name its exact target. The group said last month it was experiencing the worst retail environment it had ever seen.

As well as the need to raise cash, Blacks has been in negotiations with Lloyds Banking Group to renegotiate more than £40m worth of debts that fall due at the end of February.

The discussions have proved fruitless, forcing the company to put itself up for sale yesterday. One insider said: "There was good response from the shareholders, but there wasn't the support for the capital raising. The appetite wasn't there."

Sources close to the group would not be drawn on whether a pre-pack administration was imminent. One source said: "All focus is on a sale. These are strong brands and it is still a market leader."

Last year the company turned down a 62p-a-share bid from Sports Direct, owned by the Newcastle United chairman Mike Ashley. Sports Direct has a 21 per cent holding in the group.

The sources close to Blacks said the previous management team could not recommend it to shareholders as "so many conditions had been attached".

Sports Direct declined to comment on the Blacks announcement, or say whether it would return to the negotiating table with another bid for all or part of the company.

It emerged yesterday morning that Sports Direct was prepared to help Blacks with a joint venture that would share costs on warehouses, the supply chain and technology.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'