Sports Direct has pulled out of bidding for Blacks Leisure amid concerns that the outdoor retailer’s suppliers would not agree to work with the sportswear retailer if its acquisition attempt was successful.
Sports Direct made an indicative offer of 62p per share earlier this month which Blacks described at the time as “wholly inadequate” and had been given until April 1 by the Takeover Panel to “put up or shut up” concerning its intentions.
Last week Sports Direct, which is majority owned by controversial tycoon Mike Ashley, sent a letter to the board of Blacks reiterating that it was seriously considering raising its offer for the chain.
Sports Direct said in a statement: “In view of the importance of this matter and in order for Sports Direct to determine the level of any increased offer, Sports Direct requested confirmation of, and the details underlying, any supplier indications to Blacks.”
It added: “The Blacks board has neither provided this information nor denied its existence. Without clarification in relation to this issue, Sports Direct has been unable to finalise its views on the value of any potential offer. Accordingly, Sports Direct has determined that it would not be in its shareholders’ interests to make an offer for Blacks at this time.”
Sports Direct added that it may revisit a potential bid for Blacks within the next six months with the agreement or recommendation of Blacks’ board, if a third party makes an offer or material circumstances change.
Blacks said in a Stock Exchange announcement this afternoon: “This has been an unwelcome distraction for Blacks and the board of Blacks is pleased that this period of uncertainty has come to an end.
“The board of Blacks will now be able to focus completely on the implementation of a fundraising which it considers to be in the best interest of all shareholders. This will enable the business to progress further with its successful turnaround plan.”