Nike has offered 195p per share for Umbro – that’s a 61% premium on the share price prior to the approach being announced. Not surprisingly, Umbro’s board and management (some of whom are set for multi-million pound windfalls) are keen as mustard, calling it ‘an excellent deal for all our stakeholders’.
Shareholders probably can’t believe their luck either. If England fails to qualify for the European Championships (as looks likely after last week’s defeat in Russia), sales of replica shirts will nose-dive, slashing the company’s profits for next year. Suddenly it has a Nike in shining armour.
The potential joker in the pack remains Mike Ashley's Sports Direct, which owns 15% of Umbro. If Nike hasn't already cut a deal with Ashley, he could still throw a spanner in the works - he might have been able to squeeze Umbro on kit prices, but the same strategy is unlikely to work with Nike.
The Umbro acquisition is all part of the US sportswear giant’s master plan to become the biggest brand in football by the time of the 2010 World Cup. It already has deals with various leading European players and teams, but buying Umbro will give it a bigger presence in the UK. Umbro has shirt deals with six (admittedly mid-table) English Premiership clubs, plus tie-ups with top players like England crocks John Terry and Michael Owen.
After a bit of hard bargaining with the English FA, Nike will also own the rights to the England national team shirt (although the delightful Umbro rhombus will stay). This is, believe it or not, the world’s biggest-selling replica kit – though whether there’ll be many people in the Far East still buying it, once the team has been relegated to European also-ran status, remains to be seen…