Jd Sports Fashion Share Discussion Threads

[spob] 02/2/2011 09:58

JD Sports in talks to buy rival JJB

By Claer Barrett and Mark Wembridge

FT

February 2 2011 09:28

JD Sports Fashion is in talks about a possible takeover bid for rival JJB Sports, the troubled sportswear retailer.

Bury-based JD Sports confirmed that it was in "early stage discussions with the board of JJB Sports", but added that there was "no certainty that an offer will be made . . . nor as to the terms".

EDITOR'S CHOICE
JD Sports weathers storm with sales boost - Jan-07JJB Sports likely to seek £50m cash injection - Jan-03SFO halts probe into Sports Direct and JJB - Oct-19Sports Direct seeks to oppose rival's restructuring - Feb-22

Struggling JJB has been the target of takeover speculation for some time, and its shares have fallen by 80 per cent over the past 12 months, giving it a market capitalisation of just £30m.

Larger rival JD Sports has a market capitalisation of more than £400m and roughly twice the number of JJB's 250 outlets, which sell sports clothing, shoes and equipment.

"The highly preliminary nature of these discussions is such that there can be no certainty that any offer will be made or as to the terms of any offer," said JJB.

In a separate announcement, the struggling retailer announced a long-awaited placing to raise £31.5m from its shareholders to cure a covenant breach on a £25m facility with Lloyds Bank. The quarterly covenant test, which was due on January 31, has been waived following the support of JJB's five major shareholders, which include US fund Harris Associates and activist investor Crystal Amber.

The emergency fundraising, which was mooted on Christmas Eve, comes only a year after JJB staved off administration through a £100m equity raising and renegotiated leases.

JJB also updated the market on Christmas trading, revealing an 11.1 per cent drop in like-for-like sales in the five weeks to January 23. Group revenue fell 12.1 per cent in the same period and discounting in JJB's post-Christmas sale reduced the gross margin from 26 per cent to 24.9 per cent on an annual basis.

That compares with a robust performance over Christmas from JD Sports, which saw analysts upgrade profit estimates after it reported a like-for-like sales increase of 2.5 per cent in January.

Analysts at Seymour Pierce offered mixed views of the possible takeover, noting that although JD Sports, with net cash of £70m, can afford to buy JJB, there was "little overlap in the store formats – JD's format is focused on sports fashion where JJB is striving to be viewed as a sports wear specialist".

But Seymour Pierce said that suppliers such as Nike and Adidas were likely to be supportive of a deal and that "there would be significant opportunity for synergies between the two businesses".

Last month JJB Sports was fined £445,000 ($706,500) by the Financial Services Authority for failing to disclose the true cost of two acquisitions which led to a false market in shares of the sports retailer for nine months in 2008. When this information was finally disclosed in September 2008, JJB's shares fell 49.5 per cent in a single day.

And in October 2010, the Serious Fraud Office dropped its investigation into cartel activity between JJB and rival retailer Sports Direct, but it is still pursuing a criminal investigation into individuals.

Shares in JD Sports fell 1.5 per cent to 835p on Wednesday, while JJB Sports added 21 per cent to 5.6p.

[shanklin] 25/1/2011 15:30

Interesting article from 2006

[spob] 07/1/2011 12:40

Q : What's a chavs favourite car

A : Vauxhall Chavalier GTI of course

[spob] 07/1/2011 12:32

profit upgrade

good stuff


I'm developing an affection for tacksuit tramps :)

[sponges] 31/12/2010 09:08

why is spread showing around 22p - anyone know or is this a mistake
thanks sponges

[davidosh] 30/12/2010 17:45

Looks like JD narrowly missed out on picking up this one....

[davidosh] 30/12/2010 17:44

Looks like JD narrowly missed out on picking up this one....

[rik shaw] 14/12/2010 21:05

I've been watching the other thread and thought it was quiet- had not spotted this one until now. I bought in here around the £5 mark about 14months ago so quite pleased with progress so far and still looks undervalued imho.

rik

[spob] 14/12/2010 15:47

surprised this stock not getting any attention

oh well, i'm happy

[spob] 03/12/2010 05:42

JJB about to go bust

great news for cash rich JD Sports

[shanklin] 17/11/2010 06:52

Independent says Buy

[davidosh] 05/11/2010 20:11

Well it sure helped me to pick a few up at £7.79. This board is very quiet considering this is a high street retailer and in the FTSE250 ?

[martinc] 05/11/2010 19:16

A random blip today, or have I missed something somewhere?

[simon42] 21/9/2010 17:26

Would like to see these carry on north tomorrow.

[aishah] 21/9/2010 13:35

Seymour Pierce Buy Reiteration @805p

[simon42] 21/9/2010 08:25

Daz-agreed, this is solid, safe and value at current price. Couldn't have asked for much more today. Really good. In particular the positive lfl on the fashion side and opening of more fashion stores which will Start to break the overhead and lead to profits.