Ashley makes approach for Blacks

Mike Ashley is apparently making a takeover bid for Blacks Leisure. That should please the Blacks board.

Last Updated: 06 Nov 2012

The no-nonsense billionaire already has a 29% stake in the outdoor clothing and equipment company, which is a smaller rival to his own Sports Direct chain. But he and the Blacks bosses haven't exactly been rushing for the picnic-set in the past. After acquiring his stake in 2007, he moved to sack the entire board, a tactic that had chairman David Bernstein dismissing Ashley's tactics as ‘heavyweight, disruptive and bullying'. Ashley isn't exactly unfamiliar with having his corporate governance questioned - but the irony is that they fell out over his attempt to prevent Blacks offloading Freespirit, the boardwear division that has since been dragging Blacks into the red...

In his bid for Blacks, Ashley apparently has private-equity group Lion Capital for company. For both Lion and Ashley, success would mean picking up a complimentary business on the cheap. Lion owns AS Adventure Group, which controls the Cotswold Outdoor chain, so Blacks would give it a stronger footing in the sector. Ashley, meanwhile, has previously considered a full takeover of the chain to expand Sports Direct's outdoor ranges.

News that both parties may be keen for a bargain has bolstered Blacks' share price - shares closed up 42% to 38p yesterday, valuing the company at £16.2m. Blacks may feel that positive sums are long overdue. Just over two years ago, shares were worth 506p, but soon went into freefall as profits dropped from £22m to a mere £100k. Then chief exec Russell Hardy blamed the decline on ‘global warming'. Not surprisingly, he was soon out in the cold.

Last month the group issued a profits warning, blaming it largely on heavy losses at its boardwear division, Freespirit. Like-for-like sales there fell 14.9% over the Christmas period, compared with the 3.9% drop suffered by the group as a whole.

So what was the reason for Ashley's attack on the board back in 2007? He objected to their plans to offload Freespirit, which he described as the ‘crown jewel' of the group. The Blacks board may now be wondering whether Ashley saw something none of them could. Others may suggest he was exercising the same magic touch that has worked so well at Newcastle United.

In today's bulletin:
Crosby falls on sword after HBOS whistleblower row
Unemployment up again as Bank admits 'deep recession'
Ashley makes approach for Blacks
Salad days no more for UK graduates
Editor's blog: Pontificating in Portmeirion

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