Blacks Leisure Group has turned down a non-binding offer from Sports Direct to buy all of its shares, issued and to be issued, for 62 pence apiece. This was a 3.33 percent premium over the share price at closing the evening before the offer was made. However, Blacks called it wholly inadequate. For it to have passed it would have had to meet several pre-conditions, including unanimous approval by Blacks’ board, and the board did not think that the conditions could be met.
By buying a 28.5 percent stake in Blacks, Sports Direct recently blocked the company’s attempt to raise £20 million (€22.3m-$29.9m) to help complete its turnaround plan, which was supposed to increase shareholder value. Blacks says now that its competitor, Sports Direct, is trying to transfer that potential value to itself. Sports Direct was offered pre-emptive participation in the fund-raising.
Blacks’ board says it still considers the fund-raising to be a sound plan and will attempt another vote, one that will require a simple majority of shares being voted on the resolution.
Blacks noted that this information was released without the consent of Sports Direct, and that there was no certainty that an offer would be made to shareholders or about the terms on which any offer might be made.
A Takeover Panel from the U.K. has ruled that Sports Direct must announce that it is or is not going to make a formal bid for Blacks by April 1. Otherwise, it will be prevented from making an offer for six months.
