Mike Ashley nets £100m from sale of 4% holding

Mike Ashley still owns 64% of the Sports Direct retail chain. Picture: PA
Mike Ashley still owns 64% of the Sports Direct retail chain. Picture: PA
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SPORTSWEAR tycoon Mike Ashley sparked buy-out speculation yesterday after he sold a 4 per cent stake in his retail chain, raising £100 million.

Ashley, who also owns Newcastle United Football Club, has been linked with a number of potential acquisitions including Jenners-owner House of Fraser and failed youth fashion chain Republic.

But shareholders in Sports Direct took issue with the sell-off as the share price fell 5 per cent, wiping more than £120m from the value of the company. The shares closed at 409p. The disposal of 25 million shares still leaves Ashley with a stake of about 64 per cent, down from around 68 per cent.

It is thought that Ashley is aiming to build a stable of fashion brands after he acquired Firetrap, Full Circle and upmarket retail chain Flannels last year. Sports Direct’s brands include Dunlop, Everlast, Karrimor, Lonsdale and Slazenger and style chain USC. Although Ashley has attempted to play downpersistent rumours that he could buy House of Fraser, many see a move for the 62-strong department store chain as a distinct possibility.

But competition for assets is becoming fierce. Yesterday, it emerged that the family behind the discount store Matalan were vying, along with Ashley and former Marks & Spencer boss Sir Stuart Rose, to acquire the assets of Republic that have not been shut down by administrators Ernst & Young.

Earlier this month, Sports Direct’s rival, JD Sports, beat Ashley to snaffle youth fashion brand Goi Goi from administrators. But independent retail analyst Nick Bubb said he believed Ashley’s share sale was made in response to requests to free-up stock to investors.

“I think he’s doing it to improve liquidity in the stock – if he was intending to bid for retail assets, he would do that through Sports Direct,” he said.

Sports Direct was seen as a major winner in the Christmas sales stakes after it soaked up market share in the wake of the collapse of rival JJB. Last week, it reported sales had risen by 21 per cent to £590m between 29 October and 20 February.