Insider Media Limited

Sports Direct has opted not to bid for embattled retailer Blacks Leisure, it told the Stock Exchange this morning (16 December 2011). The Mansfield company, owned by Mike Ashley who has a significant stake in Blacks, had raised the possibility of an approach earlier this week (13 December 2011).

However, it said today that "after careful consideration" it has "decided not to proceed with an offer for Blacks Leisure".

Blacks Leisure, which trades from 98 own-branded outlets as well as 208 Millets stores and the Peter Storm and Eurohike brands, announced that it would be looking for a buyer earlier this month.

After major refinancing agreements and failed fundraising bids, the Northampton company said it was inviting offers through its adviser, accountancy firm KPMG.

The company previously announced that it needed additional funding to carry out its strategic plans, and said the board was "considering other financing options, including strengthening its capital structure".

Blacks announced in October that it was on the hunt for investment, but shareholders including Ashley, failed to put up the funding.

After meeting with several potential new investors and existing shareholders, directors said on 7 December they did not think sufficient funds would be raised.

A statement read: "The directors not believe the group will be able to complete a fundraising which would provide for the equity requirements of the group on the basis of its current capital structure and indebtedness.

"As a result, the directors now wish to invite offers to support further investment in the group, which is most likely to involve a sale of the company or sale of one or more of the group's brands."