Mike Ashley has put in a takeover bid for the online shopping specialist Findel after increasing his stake in the company.
The Sports Direct tycoon’s company said on Monday that it had agreed to buy shares in Findel worth £9.7m, taking its stake in the Accrington-based business from 29.9% to 36.8%. Under takeover rules any investor who acquires more than 30% must make a bid for the whole company.
Findel sells a range of fashion, homeware and gifts on its Studio.co.uk website. It is also the second largest supplier of equipment and supplies to schools in the UK. It reported revenues of £479m and £22m in profits for the year to 30 March 2018.
The acquisition is the latest of a series of moves by Ashley, who has positioned himself as a potential saviour of the ailing British high street, to expand his retail empire beyond its sports shop core.
Sports Direct already owns struggling department store House of Fraser, Evans Cycles and Sofa.com, following a corporate shopping spree in the past year.
The new offer values Findel at about £139m. The offer price of 161p per share was, however, below the 162p closing price on Friday. Findel shares touched 302p last July.
In a statement to the stock exchange Findel’s directors said Ashley’s offer significantly undervalued the company and its prospects. The board said it was “unanimous in its rejection of the offer of 161 pence per share” and urged shareholders to take no action.
Findel’s share price rose by more than 8% on Monday to about 175p, suggesting Ashley may have to raise his offer if he really wants to win control of the business.
Sports Direct said it did not intend to cut any jobs or make changes to Findel’s operations, but that it wanted to deepen its existing commercial relationship. Sports Direct has already run trials selling its clothing brands online via Studio after investing initially in Findel in September 2015.
Studio started out as as Express Gifts, a catalogue retailer focused on Christmas cards and presents, but increasingly moved toward online retail and financing offered throughout the whole year. It changed its name to Studio Retail in January this year, and has 1.9m customers a year.
Sports Direct also owns a stake of just under 30% in the department store Debenhams. Ashley and another investor ousted Debenhams’ leadership in January during wrangling over a financial lifeline, and Sports Direct bosses have previously fuelled speculation about a possible bid.
Ashley also briefly toyed with the idea of purchasing Patisserie Valerie last month, following an accounting scandal at the cafe chain, but pulled out shortly afterwards. He also bid to take over HMV when it collapsed into administration after Christmas, but lost out to the Canadian music chain Sunrise Records.
