After a sharp drop in its share price early last month, Amer Sports has attracted a new investor and seen the return of a more familiar shareholder. Novator Finland Oy, the Finnish arm of a UK-based investment fund launched by Thor Björgolfsson, an Icelandic billionaire businessman, bought forward contracts for future purchases of Amer shares that could amount to a stake of 20.31 percent in Amer. At the same time, Sports Direct International (SDI), the British sports conglomerate controlled by Mike Ashley, snapped up a stake of 4.96 percent in Amer, less than three months after selling a larger chunk of shares in the world’s largest sports equipment company.
There is no suggestion that the two parties are acting in concert. Even if they were, their joint stake adds up to more than 25 percent, giving them no added rights under Finnish stock market rules. Novator points out that it has no relationship with Ashley, and that its investment in Amer is not meant to ward off any further moves by SDI.
Novator did cause confusion in the process of acquiring its stake in Amer. It started by forming a partnership with Ajanta Oy, a Finnish investor that was the largest shareholder in Amer with forward contracts amounting to a stake of 22 percent. It was initially announced that Novator was taking over about half of Ajanta’s forward contracts, and that the joint shareholding of Novator and Ajanta could amount to a stake of 25.17 percent in Amer.
However, later in the week, the agreement between Ajanta and Novator was terminated, with Novator taking over most of Ajanta’s remaining shares in the Finnish group. After this second transaction, the contracts held by Novator represent 14,688,900 shares, or 20.31 percent of the company and its voting rights. A batch of 1,940,800 contracts will mature on Feb. 15, 2008, while the others will mature on June 19, 2008. The remainder of Ajanta’s forward contracts was sold to one or more unidentified third parties.
Novator said the deal should be regarded strictly as a financial investment. Amer shares were pummelled earlier this month after the company unveiled a sharper-than-expected downturn in sales of alpine skis last year, and announced large-scale restructuring plans in its production of alpine skis and boots (see the previous issue of SGI Europe). Between these announcements and the overall market downturn, Amer has lost more than one-quarter of its value since the beginning of the year. Its stockmarket value grew last year by 7 percent to €1,337 million.
However, Novator sees very strong potential for the company. This analysis was apparently shared by Ashley, since SDI forked out about €48.2 million to buy a new stake of 4.96 percent at about €13.5 per share. Last year SDI had accumulated a stake of 12.1 percent in Amer and sold it again on Nov. 7, 2007 at about €19 per share. Analysts therefore have some confidence about this latest investment by SDI, although they are still miffed by the seemingly hap-hazard pattern of its acquisitions. The company simply explained that Amer “fits its criteria for strategic investments,” which should “provide the company with the opportunity to gain strategic or commercial advantage.”
Meanwhile a court in Annecy has suspended the 284 layoffs ordered by Salomon at its French facilities at the request of the unions, requiring a prior consultation process with them.
