Potential bidders opt to pick over Blacks’ bones

HOPES are fading of a rescue takeover bid emerging for collapsed outdoor chain Blacks Leisure this week, as sources claim bidders are waiting for the retailer to fall into administration so they can pick up assets on the cheap.

Blacks revealed last week that it had failed to secure cash to fund a turnaround plan and was now inviting offers for the group.

One potential bidder is likely to be Newcastle United FC owner Mike Ashley’s Sports Direct, which is Blacks’ largest shareholder with a 22 per cent stake. Private equity bidders are also said to be running the rule over the distressed group, where investors risk seeing their stakes wiped out.

Private equity names in the frame are believed to include Bridgepoint Capital, CVC, Cinven and Candover. However, Sports Direct declined to say whether it would mount a takeover bid or allow Blacks to slide into administration.

One source told Scotland on Sunday: “It’s tough on shareholders in Blacks, but you would have to bet it is far more likely for the company to go into administration around Christmas or the New Year rather than a takeover bid materialising.

“That is what happened to Alexon recently and Woolworths a few years back. That way buyers can pick up the assets on the cheap once the administrators clear out the liabilities such as pension commitments.

“Then buyers can pick out the stores they want to keep and not be faced with the closure costs etc. Private equity players in particular might view Blacks as a good asset strip and turnaround situation after administration.”

Blacks was founded in 1861 when Thomas Black launched a sail manufacturing business in Greenock, and is still Britain’s largest outdoor retailer with 98 Blacks outlets and 208 Millets stores.

The group, which issued the latest in a flurry of profit warnings two weeks ago, revealed last week that advisers KPMG had started a formal sale process after investors indicated they would not back another capital‑raising.