Ashley’s group sells stake in rivals JJB
May 29 2009 by Iain Laing, The Journal
NEWCASTLE owner Mike Ashley’s Sports Direct International has offloaded its 4.8% directly-owned stake in struggling rival JJB Sports.
Speculation is mounting over the identity of the buyer after the Sports World parent sold 11.9 million ordinary shares.
But it is thought that Mr Ashley still holds further JJB shares through contracts for difference, which are a type of derivative.
Fellow sports chain JD Sports Fashion was among those rumoured to have been in the frame as a buyer for the shareholding, although it declined to comment.
JD already has a near-10% stake in JJB.
Wigan-based JJB has been subject of stake-building recently, with activist hedge fund Crystal Amber only last week raising its shareholding in the group to 13.8%. The sportswear group last month agreed a rescue deal with landlords to stave off administration, but it has seen like-for-like sales continue to fall and suppliers become reluctant to deal with the firm following its high profile troubles.
Sports Direct bought its ordinary shares in JJB last October for £3.4m – a transaction that caught the eye of the Office for Fair Trading, although it was later cleared by the competition watchdog.
The stake sale appears to have netted the group a small profit, with the holding worth around £4.4m based on Wednesday’s closing price.
Mr Ashley’s group owns stakes in a number of its rivals, including a 13% direct-holding in JD Sports and a 29.9% interest in outdoor clothing specialist Blacks Leisure.
