Ashley sells £87m sites to Sports Direct
Sports Direct has conditionally agreed to acquire 32 properties from one of its major shareholders. The Mansfield-based sports retailer has spent almost £87m on the purchase of the portfolio from Mike Ashley, who is also a director at the company.
Sports Direct is now awaiting shareholder approval to complete the £86.8m deal.
The 32 properties are all sites which sportsdirect.com, the company's online subsidiary, use as trading bases across the UK. The freehold or long leasehold interest is held by Ashley in each instance.
A statement from Sports Direct said the directors, other than Ashley, have concluded that it would be "advantageous for the group to own the freehold (or long leasehold) interest in a significant number of the properties from which the group trades".
The proposed acquisition will be financed through the company's existing cash resources and banking facilities, it said.
As Ashley is a director and a substantial shareholder of Sports Direct, the deal is a related party transaction, the company told the Stock Exchange.
Under the conditions of a related party deal, the acquisition requires shareholder approval. Ashley will not vote on the resolution which will be proposed at the company's next general meeting on 7 September.
Sports Direct operates 394 stores in the UK (excluding Northern Ireland) of which it owns 16 freehold premises and one long leasehold.
Since 2007, the company has spent about £100m on the acquisition of the 16 freehold properties in the UK.
The news comes as Sports Direct welcomed a decision by the Office of Fair Trading (OFT) to drop an investigation into the sports goods retail sector.
The watchdog had said it had "provisionally decided to close its investigation into alleged anti-competitive conduct in the sports goods retail sector" yesterday (11 August 2011).
"We welcome the announcement by the OFT. It is in line with Sports Direct's long held views on the investigation. It is also consistent with previous decisions taken by other regulatory bodies," said Sports Direct's chairman Keith Hellawell.
