The offer was a mandatory one, since Sports Direct had increased its stake in Findel to 36.8% of the company’s issued share capital - taking it above the Takeover Code limit at which a bid for the company becomes compulsory. Its purchase of six million shares in Findel, for 161p each, gave it a 36.8% stake in the company’s issued share capital. Sports Direct has now bid 161p per issued share, valuing Findel at £139.2m.
Findel owns Express Gifts, which operates Studio and Ace well as an education division, Findel Education. On its website, Findel says that it serves 1.8m customers a year, who buy from a range that extends from fashion and household goods to toys and gifts at affordable prices. Customers either pay for their purchase within 28 days or through monthly payments. More than two-thirds (68%) of sales take pace online.
The move comes after Sports Direct piloted selling its own licensed clothing brands on the Studio website. It said in today’s announcement of the offer that the tie-up between the two were designed to improve Express Gifts’ offer for value conscious shoppers. It added: “Sports Direct continues to recognise the value and quality of the Findel business and sees the offer as an opportunity to give increased support to Findel to maximise the value of its existing business. The offer is as an effective way of expanding the commercial arrangements between Sports Direct and Findel and giving Sports Direct increased exposure to the future growth of the Findel businesss.”
If the offer were successful, Sports Direct, which is led by its majority shareholder Mike Ashley, would add Findel to a stable boosted in the last year by the additions of House of Fraser, Evans Cycles and Sofa.com. The group also has a stake in Debenhams.
However, the offer seems unlikely to succeed at that price, since Findel’s share rose to 175p on the news of the bid. Responding to the offer, Findel said the bid “significantly” undervalued the group and recommended shareholders not to accept it.