A month after upping its stake in the beleaguered chain, JD Sports Fashion PLC has announced that it will buy the remaining shares of Footasylum PLC in a cash deal worth 90.1 million pounds, or $119.25 million.
The acquisition, which is expected to be completed in the next month or so, puts JD’s offer at 82.5 pence per share — only half the value of Footasylum’s initial public offering of 164 pence in November 2017. It also comes a month after the British sportswear giant — parent to many retail banners including The Finish Line, Scotts, Getthelabel.com and Chausport — increased its holding on the company to 18.7 percent.
“We are pleased to make this offer for Footasylum, which is very complementary to our existing businesses in the U.K.,” JD’s executive chairman, Peter Cowgill, said in a statement. “We believe that there will be significant operational and strategic benefits through the combination of the very experienced and knowledgeable management team at Footasylum and our own expertise.”
Footasylum has struggled in the past year with weaker-than-expected profits and revenues, citing “challenging times in the retail industry” and “weak consumer sentiment.” News of the agreement with JD sent the company’s shares up about 75 percent, following a 46.50 pence closing price on Friday. (The deal still requires shareholder approval.)
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“The Footasylum board has concluded that the offer represents the best strategic option for Footasylum and its employees,” added Footasylum executive chairman Barry Bown. “It believes the offer fairly reflects Footasylum’s current market position and prospects on a standalone basis and, as such, that Footasylum shareholders should be given the opportunity to realize value from the offer.”
U.K.-based Footasylum was founded in 2005 by David Makin, one of the co-founders of JD Sports. He was joined three years later by John Wardle, JD’s other co-founder, who served as CEO until 2015 and then as executive chairman.
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