The sale of JJB Sports’ gym business to Dave Whelan is reported to be close to completion in spite of efforts by Sports Direct founder Mike Ashley to scupper the deal.
Reports over the weekend suggested Sports Direct founder Mike Ashley had written to JJB’s landlords asking them not to reassign leases to Dave Whelan, the original founder of JJB, who is close buying back JJB’s gym business for £70m.
The future of the entire JJB Sports chain rests on the Whelan deal completing this week – without it JJB Sports will not have the cash to pay its bank loans or its landlords cash due this week and it will collapse into administration.
Sources suggest Whelan will buy the business by Wednesday this week.
The Sunday Times said that Ashley had made a £80m bid for JJB Sports’ gym club business before Christmas but said that no deal was agreed and that Ashley was subsequently frozen out of the auction, with Whelan given exclusivity on a deal.
Dave Whelan’s response
Meanwhile Whelan told The Observer newspaper that Ashley had encouraged him to let the chain he founded go bust. The pair are believed to have had a meeting two weeks ago at the Wrightington Hotel & Country Club in Wigan.
Whelan is quoted as saying: “He said it I backed off from the deal he’s guarantee I’d get the health clubs at half the price I’d agreed to pay.”
If JJB sports did fall into administration around 11,800 jobs would be under threat.
The Sunday Times newspaper added that a collapse of the business would likely lead to a bidding war, with JJB Sports chairman David Jones and strategic development director Peter Williams battling with Ashley and JD Sports Fashion to buy the chain’s best stores.