Private equity firms told Drapers that Blacks Leisure had been in touch with them in the past fortnight, to assure them that Sports Direct founder Mike Ashley would not move to block a sale of its surfwear business.
However, Blacks Leisure representatives are thought to have warned that trading at Freespirit had “softened” over recent weeks, but said they would not be cutting back their £40 million price expectation.
Sportswear firm Sports Direct holds almost 30% of outdoorwear group Blacks Leisure. In June Ashley threatened to call an EGM and oust the Blacks Leisure board if the group sought to offload its Freespirit arm, which includes O’Neill, Mambo and Just Add Water.
One source who has looked at the business remained uncertain as to Sports Direct’s intentions. He said: “The information coming out of Blacks is flimsy at best. It may be that Ashley won’t make a move if Blacks can achieve the £40 million or close to it, but it’s impossible to second guess what he might do. Certain private equity firms are insisting that Blacks underwrites due diligence costs and accountancy fees in case Ashley changes his mind.”
A second source close to the situation said: “Blacks says trading has slowed, but it’s not clear how far it is behind target. Whichever way you look at it, it’s a hefty price tag and a private equity firm would need to bring someone in to run it.”