Breaking News: Angry JD walks away from JJB deal
JD Sports Fashion has pulled the plug on its potential takeover of struggling JJB Sports.
An exasperated JD executive chairman Peter Cowgill said JJB had failed to “engage at all” in the process.
He said: “I am very, very, surprised – amazed about this. JJB’s silence has been deafening.”
JJB has instead pushed ahead with plans for a second Creditors Voluntary Agreement in two years – which could see it close 90 underperforming stores. Having raised £31m last month the company says it will need to raise another large chunk of cash from shareholders to continue.
Commenting on this, Mr Cowgill said: “I am sure we would have achieved a better solution than this.Let battle commence.”
In a statement to the Stock Market, Bury-based JD said it reserves right to make an offer for its beleaguered Wigan counterpart if circumstances change.
These include if JJB’s board agree to recommend a deal, if an offer for the company is made by another party, JJB announced a reverse takeover, if JJB’s proposed CVA fails, or “if there is a material change of circumstances.”
The JD statement said: “Despite requests made with a view to enabling it to put forward alternative proposals for the future of the JJB business, since the beginning of February 2011 JD Sports Fashion has received no further information whatsoever from JJB Sports.
“Following a detailed assessment of the opportunity from the further public information made available in the detailed CVA proposals issued on March 3, JD Sports Fashion now confirms that it has decided that it does not intend to make an offer for JJB Sports.”
JJB Sports said that it welcomed JD’s clarification of its intentions as it allowed the company to focus exclusively on its own restructuring. It also said the indicative proposal from JD was “highly conditional and lacking sufficient certainty to be deliverable”.
JJB’s chairman Mike McTighe said: “We welcome today’s clarification from JD Sports.
“JJB’s restructuring continues as planned with the whole management team focused on and committed to delivering a stable standalone future for JJB and its employees.
“The board remains confident that with the support of our stakeholders we can achieve a successful turnaround of the business.”
