OFT clears Sports Direct’s JJB stake
SPORTS Direct’s stake in JJB Sports has been cleared by the Office of Fair Trading.
Last year the OFT said it was investigating whether Sports Direct’s holding in its Wigan-based rival created a merger situation.
It paid £3.4m to JJB for new shares equivalent to 5% of the company in October, while it has also built an additional 16% holding via contracts for difference.
In a brief statement the OFT said: “The OFT has decided, on the information currently available to it, that a relevant merger situation, under the provisions of the Enterprise Act 2002, has not been created in the following merger.”
In a separate investigation the watchdog is still examining Sports Direct’s purchase of four JJB shops for £3.4m on December 1. It is considering whether the deal will result in a merger situation and damage competition in the sportswear market.
Meanwhile, JJB’s workforce will demonstrate on the steps of Barclays Bank headquarters against its heavy handling of the beleaguered company, which they say could force it into administration.
They fear that JJB will collapse if Barclays – which, along with Kaupthing and HBOS, is charging the company £8.3m to extend its £20m overdraft by six weeks – doesn’t back off.
Employees think the bank, which is owed £60m in total, is forcing JJB to sell its profitable gyms chain.
But they say that selling the gyms will mean the rest of the group could collapse and that in its desperation to get its cash, Barclays is putting jobs as risk. The company employs 12,000 staff across the country.
Wigan MPs Ian McCartney, Neil Turner and Andy Burnham have said they will broker crisis talks between JJB and Barclays. There are also plans to pass a petition to Lord Mandelson asking for government intervention.
