Apparently, Mike Ashley's Sports Direct International has lost the battle for the ownership of Elverys Sports, the second-largest sporting goods retailer in Ireland after Lifestyle Sports. The examiner appointed by the High Court to review the various takeover proposals, Simon Coyle, named the management team as the preferred new investor in the company last March 31.
The examiner's office has already formulated proposals for a settlement with the creditors of Elverys' parent company, the insolvent Staunton Group, whose debts are mainly related to former real estate operations. The proposals have been submitted to the creditors for approval and for subsequent endorsement by the High Court, which is tentatively expected within the next three weeks.
This preliminary move is an important step for Intersport U.K., of which Elverys is a member. Along with an Irish financial group, Capnua, Intersport U.K. and its parent company, AIS, are supporting the bid made by the chain's management team, led by Patrick Rowland, in several ways.
All the 55 Elverys stores in Ireland will be renamed Intersport Elverys as part of the arrangement. However, reportedly, this is a move that had already been in the planning prior to the attempted MBO and is more a result of Elverys' desire to reposition itself, taking advantage of Intersport's growing significance in the British and Irish markets. Both Rowland and Tom Foley, general manager of Intersport U.K., declined to make any direct comment before completion of the process.
As reported in our Feb. 27 issue (vol. 25 – 7+8), Sports Direct had offered to pay €12.5 million for Elverys through Heatons, the Irish department store chain in which it has a 50 percent interest. Sportsworld sections managed by Sports Direct operate in 26 of these department stores. Ashley flew personally to Dublin to put his weight behind Heatons' bid, but his offer was not accepted. Regretting the examiner's decision, Sports Direct's management has indicated that it is now planning to use the money it had set aside for Elverys' acquisition to boost Sportsworld's presence in Ireland.