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JD Sports buys up stake in troubled trainer-selling rival Footasylum


JD Sports buys up stake in troubled trainer-selling rival Footasylum but insists it’s not plotting a takeover

  • JD Sports has snapped up an 8.3 per cent stake in rival retailer Footasylum 
  • Shares in struggling Footasylum soared nearly 70% to 49p on the news
  • JD Sports said it will buy more shares but insists it has no plans for a takeover

Emily Hardy For This Is Money

Trainers and sportswear retailer JD Sports has bought up sizeable stake in its rival Footasylum, triggering a sharp rise in the latter’s shares. 

Footasylum, which has suffered a dismal year amid challenging trading conditions, saw its beleaguered shares rocket 70 per cent to 49p on the news. 

JD Sports has bought up a stake in Footasylum, but said it will not launch a takeover of its rival

JD Sports has bought up a stake in Footasylum, but said it will not launch a takeover of its rival

JD Sports has bought up a stake in Footasylum, but said it will not launch a takeover of its rival

JD Sports bought the 8.3 per cent stake for, it said, ‘investment purposes’, and said it was prepared to acquire up to 29.9 per cent in the recently-listed firm – just below the mandatory takeover threshold of 30 per cent. 

However, it insisted it is not intending to table an offer for the firm.

In a stock exchange announcement, JD Sports said: ‘This share purchase is a strategic investment for the group, which has confirmed today that it is not intending to make an offer for Footasylum.

‘By publicly disclosing this […] the City Code on Takeovers and Mergers precludes JD Sports from making any such offer unless specific circumstances change.’ 

JD’s stake acquisition, which amounts to 8.67 million shares, comes after Footasylum issued a series of profit warnings, sending its shares tumbling.  

In January, the firm said its profit margins were hit by steep discounting over the festive season and warned that Brexit uncertainty and weakening consumer sentiment were causing ‘some of the most difficult trading conditions seen in recent years’.

A few months earlier, Footasylum said it was putting the brakes on its store opening plans after swinging to a £2.5million half-year loss.  

Chart shows how Footasylum's share price sunk when it first warned of challenging trading

Chart shows how Footasylum's share price sunk when it first warned of challenging trading

Chart shows how Footasylum’s share price sunk when it first warned of challenging trading

The firm, which has the youngest CEO of any British public company, floated in 2017 with a market value of £171million. Today it has a market capitalisation of just £51.8million. 

Footasylum was founded in 2005 by David Makin and John Wardle, who also founded JD Sports and raked in millions when the firm listed. 





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