Sports Direct abandons Blacks takeover
01 April 2010 09:49
Sports Direct has abandoned plans to make a takeover bid for Blacks Leisure after concerns were raised that suppliers would pull their goods out of the outdoor firm's stores if the deal went ahead.
Sports Direct, which is Blacks' biggest shareholder, said that it had asked Blacks for details of any expressions of intent from suppliers, but the firm had "neither provided this information nor denied its existence".
"Without clarification in relation to this issue, Sports Direct has been unable to finalise its views on the value of any potential offer," the firm said.
"Accordingly, Sports Direct has determined that it would not be in its shareholders' interests to make an offer for Blacks at this time."
In an announcement, Blacks called the potential takeover an "unwelcome distraction" and said that it was "pleased that this period of uncertainty has come to an end".
It added: "The board of blacks will now be able to focus completely on the implementation of a fundraising which it considers to be in the best interest of all shareholders. This will enable the business to progress further with its successful turnaround plan".
Blacks has suffered a difficult past couple of years, leading to a restructuring and the closure of 87 loss-making stores in the fourth quarter of 2009 after securing a rescue deal with its landlords.
But the firm has seen improved trading and now wants to refurbish its core estate and reopen shops in areas where it closed stores that it felt were subject to high rents and therefore loss-making despite strong sales.
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