Sports Direct said the board of Findel has “under-delivered for its shareholders” by overruling a proposal to appoint Ben Gardner, a representative of Sports Direct, as a board member.
As soon as the sporting goods retailer served notice of a meeting to decide on the appointment Findel, the home shopping group, responded by urging shareholders to vote against Gardner.
In September Sports Direct bought an 18.9% stake in Findel, and around the same time an anonymous potential buyer approached Findel about purchasing its online football kit store, Kitbag.
Since then the general consensus has been that Sports Direct is keen to disrupt a sale of Kitbag.
When Sports Direct called for a meeting to appoint Gardner, only months after unsuccessful attempts to make him Findel‘s Chief Exec in June, it was something that had not been previously discussed with Findel‘s board.
On Monday around 81% of shareholders who voted came out against Gardner at an emergency shareholder meeting. It is believed that Sports Direct has a strong interest in the Express Gifts division of Findel. There lies tangible value through the”¯customer database, credit offer and online fulfilment capability. By owning Findel as a whole Sports Direct would be able to gain control of Findel‘s capabilities in their entirety, which is likely the reason that Gardner was put forward.
Findel‘s board told shareholders that if Sports Direct wished to have more influence over the business, the best path would be to “make a fair offer for the whole company.”
Gardner would have acted as a representative of Sports Direct‘s owner, Mike Ashley. Responding to the board‘s decision, Sports Direct said: “Findel should focus on trying to run its business more successfully and not reject offers of specialist assistance.
All the Findel business segments could have been improved for the benefit of all of its shareholders with the retail expertise of Sports Direct. Mr Gardner could have helped in all these regards and would have been a positive addition of a board that Sports Direct believes has under-delivered for its shareholders.”
Findel has been without a chief executive since March and, despite announcing a transaction in September, as well continuing talks with a mystery buyer, has not been able to agree terms for a sale of Kitbag.
“Over the last five years the new leadership team of Findel has been very focused on restoring shareholder value and the group is on track to record another significant step up in profit before tax in the current financial year,” Findel said, responding to Sports Direct‘s criticism.