Maverick billionaire Mike Ashley’s Sports Direct International (SPD) has made a 5p per share cash offer for troubled Goals Soccer Centres (GOAL:AIM).
The largest shareholder with an 18.93% stake, Sports Direct today piled pressure on the board to engage in talks over a potential cut-price takeover of the five-a-side football pitch operator.
Newcastle United Football Club owner Ashley has become quite a character in the business world. He has developed a reputation for swooping on struggling retailers and unloved brands.
Indeed here in April, Shares examined the Ashley empire in detail: today, it includes House of Fraser, Evans Cycles, Jack Wills and GAME Digital, not to mention stakes in the likes of French Connection (FCCN) and Findel (FDL).
Fresh from the defeat of his legal challenge to the CVA of Debenhams on Thursday, and efforts to exploit the Competition and Markets Authority’s (CMA) probe into rival JD Sports Fashion’s (JD.) acquisition of Footasylum, Mike Ashley today revealed that Sports Direct lodged (5 Sep) a 5p per share cash proposal for the Goals shares not already owned.
The proposal values Goals at roughly £3.6m, which is a fraction of the £20m-plus market tag when the shares were suspended in March. Mired in a corruption scandal which has seen its former chief executive officer and finance director accused of fraud, Goals’ shares are currently suspended from trading on AIM and are set to be booted off the junior market on 30 September.
However, Sports Direct believes ‘an extension should be achievable if the board of Goals were committed to achieving it - which is something Sports Direct has asked the Goals board to confirm on a number of occasions.’
PUTTING THE BOOT IN
Sports Direct has truly put the boot into the Goals board, accusing it not being committed to maintaining its trading facility. ‘Instead, it seems only interested in pursuing the AMA (sale) process whilst, at the same time through the loss of the trading facility, depriving Goals’ shareholders of the ability to vote on it.’
The sporting goods giant is therefore ‘strongly of the view that the Goals shareholders deserve an opportunity to consider the possible offer’, reminding the market that as recently as 28 June 2019, Goals announced that it was performing well and generating cash. On 2 August 2019, Goals also announced healthy year-to-date sales growth across its 45 UK sites and across the pond in the US.
According to Ashley’s Sports Direct: ‘This raises the question of why the AMA Process (sale process) is necessary and any urgency in following such a process. There has been no reason given as to why a sale of the business and assets of Goals (which would deprive the shareholders of the right to consider the possible offer) is the best course of action. In addition, there does not seem to be any solvency issue which needs to be urgently addressed.’
