Sports Direct pulls out of bid for Blacks

Mike Ashley's company had concerns over supplies of goods

SPORTS Direct yesterday dropped plans to make a takeover offer for Blacks Leisure amid concerns suppliers would pull their goods out of the outdoor firm's stores if the deal went ahead.

Mike Ashley's sportswear firm, which is Blacks' biggest shareholder, said it had considered increasing its 26 million offer for the company, but its bid plans were scuppered by a lack of information about suppliers' willingness to deal with a Sports Direct-owned Blacks.

The firm said it asked Blacks for details of any expressions of intent from suppliers, but Blacks had "neither provided this information nor denied its existence".

Sports Direct added: "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."

Recent reports have suggested there were fears among some suppliers – reportedly including North Face – over Ashley's reputation as a heavy discounter.

Blacks rebuffed the initial bid from the Newcastle United owner two weeks ago, branding it "wholly inadequate". The firm has been the subject of unwanted attention by the Sports World parent firm since it snapped up a 28.5 per cent stake in February.