Partner Article

Ashley to oppose rescue plan

Newcastle United owner Mike Ashley’s Sports Direct has threatened to vote against a recovery plan at rival Blacks Leisure if it can acquire 29% of the outdoor retailer’s shares.

The firm has been locked in a dispute with Ernst & Young, the administrator of collapsed bank Kaupthing Singer & Friedlander, over the ownership of the Blacks stake and an 11% holding in JD Sports Fashion since October 2008.

On Monday it said its Sportsdirect.com retail business was trying to acquire the rights for these shareholdings and would aim to have the deal completed in time for Blacks’ investor meeting on Wednesday where it “currently intends to vote against the resolutions proposed”.

Retailer Blacks has said the £20m fundraising plans, which are due to be voted on at the shareholder meeting, mark the “crucial growth phase” of its recovery after a deal with landlords in November helped secure its future.

The group, which operates its own brand shops as well as the Millets chain, is planning up to 35 new stores and the refurbishment of existing sites.

Sports Direct, which is controlled by Newcastle United owner Mr Ashley and operates the Sports World chain, did not give a reason for its aims to scupper the Blacks fundraising.

However, it did say the decision to vote against the plans was “subject to review and final determination by the board of directors” before the meeting.

Shares in Blacks and JD Sports were broadly flat, while Sports Direct fell over 1%.

It is understood that the firm is in last minute negotiations with E&Y over the acquisition of the shareholdings, which it said would “be without prejudice to certain existing rights of the parties”.

The ownership dispute itself is currently in the hands of the courts and is thought to be set to continue regardless of the potential acquisition.

This was posted in Bdaily's Members' News section by Ruth Mitchell .