Rival probe call after sale of Blacks Leisure
Tuesday 10 January 2012
Sports Direct said today it was disappointed by the sale of Blacks Leisure to its rival JD Sports Fashion and accused suppliers of obstructing its own pursuit of the outdoor clothing retailer.
JD Sports confirmed last night it had bought Blacks Leisure's 290 stores for £20 million in a pre-pack administration deal which will protect some 3,500 jobs.
But Sports Direct, founded by Newcastle United owner Mike Ashley, said the deal was disappointing given its own bid for Blacks Leisure in 2010 which was dismissed as “inadequate”. The total Blacks share value written off amounts to £52.6 million, it said.
In addition, Sports Direct said it was unable to offer a higher price for Blacks because suppliers, such as The North Face, would not return its calls to confirm whether they would continue to supply the chain under Sports Direct ownership.
Sports Direct called for an Office of Fair Trading investigation into the outdoor and sports retail markets to ensure they are operating in the best interests of the consumer.
Sports Direct has a fractious history with Blacks Leisure.
As well as its failed 2010 bid, Sports Direct has turned down an appeal for an equity fundraising on more than one occasion and was also behind the removal of David Bernstein as chairman last summer.
Before Blacks fell into administration, Sports Direct was the largest shareholder with a stake of around 22.5%.
Sports Direct said the loss of share value would have no impact on its previous guidance for the business and hitting its bonus share scheme targets.
The North Face was not immediately available for comment.
As well as Sports Direct, JD Sports, whose largest shareholder is Berghaus owner Pentland Capital, beat Dragons' Den star Peter Jones and outdoor retailer Trespass to land the stores.
Blacks appointed KPMG as administrator earlier as it admitted it has failed to find an outright buyer after putting itself up for sale following dire trading.
JD executive chairman Peter Cowgill said he hopes to restore Blacks to its profitable, market-leading position as it rejuvenates the offer, closes loss-making stores and makes cost savings.
The deal means that the stores, the stock, and the brands including Eurohike and Peter Storm will be transferred to JD Sports but its debts of more than £30 million will be scrapped.
The process of selling businesses through pre-pack administrations is controversial because creditors do not have the opportunity to vote against the proposed asset sale.
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