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Bloomberg
JD Sports Fashion Plc agreed to buy US sportswear retailer Finish Line Inc., seeking to snatch away a company in which Mike Ashley’s Sports Direct International Plc has built a stake.
The agreement is valued at a total of $558 million. Ashley’s Sports Direct International, a UK rival of JD Sports, is the second-largest shareholder in Indianapolis-based Finish Line, with a 9.9 percent stake. Ashley’s company also holds an indirect interest of 32 percent, according to a Sports Direct statement.
A purchase of Finish Line, which operates concessions in Macy’s department stores, would give JD a significant presence in the US sports market after the UK company expanded into other European countries.
The acquisition is subject to the approval of JD Sports and Finish Line shareholders, with completion expected no earlier than June. Sports Direct, which holds some of its stake via derivatives, did not immediately respond to a request for comment.
“It’s up to every shareholder to decide on whether or not to vote in favor of the transaction, which has been unanimously backed by The Finish Line’s board,†a JD Sports representative said by phone, declining to comment specifically on Ashley’s stake.
Due to the distinct geographies in which the two companies operate, JD Sports doesn’t see any significant adjustments in headcount, the company said.
The deal, valued at $13.50 per Finish Line share in cash, represents a 28 percent premium to the closing price.
“This is a landmark day for JD and will be transformational for the business,†JD Sports Executive Chairman Peter Cowgill said in a statement, calling the deal a step toward increasing the company’s global scale.