Mountain Warehouse and Go Outdoors join race to rescue troubled Blacks

Sports Direct, the sportswear chain controlled by Mike Ashley, along with Go Outdoors and Mountain Warehouse, are among the trade buyers to register an interest in a takeover of Blacks Leisure.

The troubled outdoor specialist – which operates the Blacks and Millets chains – put itself up for sale by hiring advisers at KPMG last week after it failed to gain support for a fund raising from shareholders and potential new investors.

The group – which owns 98 Blacks outlets and 208 Millets stores – has debts of £36m and warned that the sale of the company, or one or more of its brands, could see shareholder value wiped out. It issued a profits warning last month and made a loss of £16m in the six months to 27 August.

First-round bids for Blacks Leisure are due in before Christmas and Sports Direct, which has a 22 per cent stake in the retailer, is a long-term suitor and has notified the group of its interest.

But it faces competition from outdoor retail chains Go Outdoors, Mountain Warehouse and Cotswold Outdoor.

Private equity firms are also interested but the distressed state of Blacks Leisure means that an accelerated sale to a trade buyer – which has knowledge of the retailer's offer, stores and personnel involved – is more likely.

Blacks ideally wants to complete a sale before the end of January. If it cannot complete a sale of part or all of the business, a pre-packaged administration cannot be ruled out. This enables a new buyer to take a business forward without its debt. Its shares closed at 2.1p yesterday, valuing it at just £1.8m.

All parties declined to comment.