Findel tells shareholders to reject Sports Direct’s £140m offer

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Sports Direct Findel
// Findel will today publish its official response in relation to Sports Direct’s takeover bid
// Offer was at a price of 161p per share in cash, or £140m in total
// Findel board urged shareholders to take no action and reject Sports Direct’s offer

Findel has labelled Sports Direct’s £140 million takeover offer as “opportunistic” and “strongly” urged all shareholders to “take no action and reject the offer”.

The parent company of Express Gift, which trades online as Studio.co.uk, said it would would publish its official response today in relation to the offer.

Earlier this month, Sports Direct made a mandatory offer of 161p per share, which was triggered after the Mike Ashley-owned retail company raised its stake in Findel through the purchase of six million extra shares.

The Findel board re-iterated its previous statements that Sports Direct’s offer significantly undervalued the company, compared to analyst target prices which range from 300p to 350p.

The board warned that control by Sports Direct would have “a number of potentially adverse consequences” for Findel shareholders, including an 8.8 per cent dilution in the value of shares.

“The Findel board believes that Sports Direct’s offer is highly opportunistic and significantly undervalues the group and its prospects,” chairman Ian Burke said.

“Sports Direct’s offer provides no compelling reason as to why 161p per share represents a fair price, especially given the operational and financial progress made in transforming the Group into a market-leading online value retailer.

“As stated in its offer document, Sports Direct endorses the strategic plans that the Findel board is implementing, and is supportive of the Findel leadership team delivering these.

“It is against this backdrop that the board is unanimous in its recommendation that shareholders reject the offer and take no action.”

Earlier this month, Ashley’s retail empire snapped up £9.66 million worth of shares in Findel from single shareholder City Financial Absolute Equity Fund.

Under the Takeover Code, Sports Direct had to make a cash offer for the remaining Findel shares.

A company must make a takeover bid when it raises its stake to more than 30 per cent.

Sports Direct had said it had no intention to make any changes to the Findel’s business and the employment of Findel’s staff and management.

Sports Direct has been a major shareholder in Findel since September 2015.

Ashley has made no secret about his ambitions to expand Sports Direct, leading the firm through an acquisition spree since 2018.

The company bought House of Fraser and Evans Cycle out of administration, and won a bid to takeover Sofa.com.

The firm also has significant stakes in French Connection and Game and in more recent weeks has been the centre of a boardroom tussle as he tried to acquire Debenhams.

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