Sports Direct owner Mike Ashley will make nearly £40million after arch-rival JD Sports snapped up a US chain he part owns for £396million.
In an ambitious plan to expand across the Pond into the biggest sportswear market in the world, JD agreed to buy Finish Line, which operates in the US and Puerto Rico.
Retail tycoon Ashley, 53, owns a 9.85 per cent stake in Finish Line through Sports Direct and will pocket £37million from the deal if he agrees to sell his holding.
Sports Direct owner Mike Ashley will make nearly £40m after arch-rival JD Sports snapped up a US chain he part owns for £396m
Sports Direct, which has a reputation for investing in rival retailers, previously owned shares in JD Sports but sold its entire £12.5million stake in 2016.
Finish Line, which employs 13,000, has 556 shops in the States and sells in more than 450 stores owned by department store chain Macy’s.
It sells high-end trainers and sports clothing by the likes of Adidas, Nike and Puma.
Finish Line’s executive team is expected to stay on following the acquisition.
Peter Cowgill, executive chairman of JD, said: ‘It immediately offers a major presence in the US, a clear next-step to further increase our global scale.
‘This is a landmark day for JD and will be transformational for the business.’
But Russ Mould, investment director at broker AJ Bell, warned that the deal could be transformational for JD for all the wrong reasons.
‘Many big strategic deals often end up being transformational in the worst possible sense.
‘JD has some credit in the bank, though. Despite operating in an extremely competitive and structurally challenged retail sector, its operational and financial performance has, for the most part, been hugely impressive,’ Mould said.
‘Investors will be hoping the complications of this US deal do nothing to threaten that track record.’
Smurfit takeover bid rejected
Smurfit Kappa has rebuffed a sweetened takeover offer from US rival International Paper, saying that the £7.8billion bid failed to reflect its true value.
The approach on March 22 values each of the packaging giant’s shares at 3277p, up from the March 6 offer of 3183p.
Liam O’Mahony, chairman of London-listed Smurfit Kappa, said it was in the best interests of investors for the group, which is based in Dublin, to remain an independent company.
He described International Paper’s offer as ‘highly opportunistic’. Smurfit’s shares closed down 4.1 per cent, or 126p, at 2932p yesterday.