Findel prepares for battle with Sports Direct

HOME shopping group Findel is urging shareholders to reject retail giant Sports Direct’s bid to install a representative on its board.

In a tough response, the Manchester-based company’s board said it was unanimous in its opposition to Sports Direct’s wishes and said two significant investors, Toscafund and Schroders, who jointly own 38.2% of the company’s stock, are supporting its stance.

Sports Direct, the company founded by billionaire entrepreneur and Newcastle United FC owner Mike Ashley. acquired a 19% stake in Hyde-based Findel in mid-September.

On November 6, without consulting Findel’s board, Sports Direct served notice that it wanted the company to hold a general meeting and hold a vote to potentially install its representative, Benjamin Gardener to the board. This meeting has now been set for December 21.

In a robust statement to investors Findel said it believes Benjamin Gardener does not have suitable qualifications to either join its board as a non-executive director, or as chief executive as Sports Direct has also suggested.
 
The Findel board says too that it would not be in the interests of other shareholders, or the company’s commercial interests, for Sports Direct International (SDI) to have a seat on the board.

“An independent board without any significant shareholder representation is best for all shareholders…The addition of Mr Gardener as SDI’s nominee director on the board would compromise the independence of the Board and would provide information and voice to one shareholder in preference to other shareholders.

“It is not appropriate to appoint an SDI nominee director to the Board given SDI’s commercial interests in the Company’s business (in particular, Express Gifts).”

It adds: “Your board believes that SDI sees real and tangible value for itself in the company, and in particular, the customer database, credit offer and online fulfilment capability of Express Gifts.

“The board believes that the most appropriate way for SDI to gain control of the company’s capabilities is to make a fair offer for the whole company. Were SDI to purchase the company from shareholders, it could make appointments to the Board and control the company’s business.

“Until such control is acquired and having regard to SDI’s strong commercial interests in the Company’s operational capabilities, it is not in the interests of the shareholders (other than SDI) for SDI to have a nominee director on the board.”

Findel also says Sports Direct’s stake-building has “caused concern” among customers of its own sports retail division, Kitbag.

“SDI is a direct competitor to Kitbag’s business, hence it would not be in the interests of the company or its shareholders (other than SDI) to have SDI’s nominee director on the board given this conflict of interest. SDI’s acquisition of its 19%  stake in the company has already caused concerns amongst some key business partners of Kitbag.”

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