Sports Direct to 'put up or shut up' on Blacks

SPORTS Direct has two weeks to decide whether it will bid for Blacks, after the outdoor clothing chain dismissed its £26.4 million takeover approach yesterday.

The sportswear chain, which is majority owned by Newcastle United owner Mike Ashley, has been given a "put up or shut up" order from the Takeover Panel to declare a firm intention to try to buy Blacks or walk away.

Sports Direct owns 29 per cent of Blacks and the relationship between the two companies has always been fractious.

Back in 2008 there were threats that Sports Direct would attempt to remove Blacks' board of directors. More recently Sports Direct, 71 per cent owned by the reclusive Ashley, used its stake to block a plan by Blacks to raise 22m through a placing and open offer, before launching a plan to buy the company.

Yesterday Blacks said it had rejected the 62p a share offer, pointing out that it was a premium of just 3.33 per cent to the closing price the night before it was received. After consulting advisers, Blacks said it deemed the offer "as being wholly inadequate".

There were reports that its other shareholders are prepared to hold out for an offer of at least 100p a share.

Northampton-headquartered Blacks said it believed its plans to carry out a turnaround plan with the help of its cash call "would have led to a substantial increase in shareholder value".

In a statement it said it believed Sports Direct "is now attempting to transfer that potential shareholder value from shareholders to Sports Direct".

The company is now investigating a plan to allow it to raise the cash, structuring it in a way that required the support of only a simple majority of shareholders.

Sports Direct said its offer for Blacks, made on 17 March, was a 21 per cent premium to the share price before it said it was considering a bid, and higher than the market price of Blacks' shares over the last three months.

Its board was "disappointed" that Blacks did not recommend the bid but "continues to hope that (Blacks] will recognise the merits of an offer which, if made, it believes would be highly attractive for Blacks shareholders", particularly in the context of Blacks' share price performance over the past 12 months.

Shares in Blacks closed down half a penny at 60.5p. Sports Direct dropped 0.7p to 105.1p.