OFT probe into sale of failed JJB's shops
Sunday 16 September 2012
Mark Leftly, James Thompson
The Office of Fair Trading is expected to investigate any attempt by Sports Direct to snap up the 180 stores owned by JJB Sports, which is expected to file for administration later this week.
Mike Ashley's sportswear giant is thought to be the favourite to acquire the remnants of JJB, though the Newcastle United owner is interested in fewer than 50 of the stores.
Even with additional interest from JD Sports Fashion, it is considered likely that more than 100 shops will close, resulting in the loss of at least 2,000 jobs. JD has been interested in taking over JJB since at least early last year, when the parties were in early-stage takeover talks that came to nothing.
JJB is almost certain to appoint administrators this week in a pre-pack deal, which will allow a new owner to buy it out of technical insolvency with fewer shops and far less debt. Over the past four years, investors have pumped more than £225m into the business, which has struggled badly as families tightened their wallets.
The OFT has previously looked into Sports Direct's interests in JJB, including store sales. Sports Direct also owned a stake in JJB, though this was sold three years ago.
If, as expected, JJB files its notice of intention to appoint administrators this week, there will be 10 working days to secure a rescue deal.
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