Blacks Leisure, the leading British outdoor retailer, has overcome an attempted block by its largest shareholder, Sports Direct International (SDI), to raise funds for its turnaround plan. At a general meeting held last week, Blacks’ managers obtained approval from the company’s shareholders to raise £19.7 million (€23.0m-$28.2m) through a share issue that required only a simple majority of the votes. This nearly halved SDI’s stake in Blacks, as the wayward shareholder declined to take part in the issue.

SDI, the largest British sports retailer and wholesaler, thwarted an earlier attempt by Blacks Leisure to raise cash, in a scheme that required approval by shareholders representing at least 75 percent of the company’s shares – at a time when SDI still had a stake of about 28.5 percent in Blacks Leisure. This stake was diluted to just over 27 percent last month, when VF Corporation, the owner of The North Face and many other sports and fashion brands, acquired warrants in Blacks Leisure and quickly converted them into shares making up nearly 5 percent of the company. But this week, after the share issue, SDI was left with only about 14.5 percent of Blacks Leisure.

This fueled speculation that, after several years of tensions and maneuvers, SDI might have lost interest in acquiring Blacks Leisure, the company behind the Blacks, Millets and Free Spirit banners. A few weeks ago SDI decided against making an offer for Blacks Leisure, saying that leading suppliers had threatened to quit delivering to Blacks under the ownership of SDI.

On the other hand, it emerged that the Pentland Group, the owner of the Berghaus and Chris Brasher brands, among others, had snapped up a stake of 5.86 percent in Blacks Leisure. The company already has a controlling stake of 57 percent in JD Sports, the third-largest sports retailer in the U.K.

Approved by 62 percent of the votes, the fund-raising involved the issuance of 39,281,011 shares at 54 pence per share – a discount of 12.2 percent discount from the closing price on April 29, the day before the offer was unveiled. Blacks’ chief executive, Neil Gillis, pointed out that, excluding SDI interests, 99.9 percent of the shareholders had approved the share issue. The money raised through the issue will be used to open 35 stores in the next two years, to refurbish other stores and to pay down debts.

In an oddly timed move, just days before the share issue, the Office of Fair Trading (OFT) said that it was considering whether SDI’s stake in Blacks led to what it describes as a “relevant merger situation.” As the OFT pointed out, SDI is already the owner of Field & Trek, an outdoor retailer. Taken over by SDI in 2007, Field & Trek has only a few stores left, but the name is used for outdoor corners in Sports Direct stores. Should the OFT conclude that this situation skews market competition, it could be referred to the Competition Commission.