Takeover bid hits JD Sports shares

BRITISH retailer JD Sports has received a £99.8m takeover offer from the company headed by former Reebok entrepreneur Stephen Rubin.

Pentland Group, Rubin's quoted company which is behind the Kickers, Berghaus and Speedo clothing brands, said it would offer 211.2p a share for John David Group - a discount of around 8.6% to JD's closing price of 231p last night. The price tumbled 12½p - more than 5% - to 218½p in early trading today.

Pentland already held an 11% stake bought from co-founder John Wardle last July, but today agreed to buy another 45%, worth £45m, from Wardle and co-founder David Makin and their families.

This triggered an automatic bid for the rest of the company. Rubin wants other shareholders to reject the offer so that John David can retain a stock market quote.

The news came as the company announced a revival in its fortune with pre-tax profit for the full-year to the end of January surging 25% to £2.6m from £2.1m. Sales were up 3% to £471.7m and up 4.7% on a like-for-like basis. Net debt was reduced from £51.1m to £30.8m.

A year ago the company said it would review all 'strategic options' after profits more than halved.

Stephen Rubin, chairman of Pentland, said: 'JD is a business that we know well, run by a management team in which we have every confidence. It is positioned in a fast-growing segment of the UK retail industry and we are delighted by this opportunity to become a substantial, long term and supportive shareholder.

'We would be pleased to purchase JD Shares from anyone wishing to accept the offer. However, given the view we have of JD's future prospects, and the discount to the market price represented by the offer, we are not expecting ahigh level of acceptances.

'Indeed, we look forward to sharing in the future of JD alongside other JD Shareholders who, like us, have faith in JD's future.'

JD was set up by its founders, John Wardle and David Makin, in 1981. It floated on the stock market in in 1996. Pentland said it expected the founders to resign from the board.

Pentland is based in Finchley, north London and owned by Stephen and Angela Ruben and their family. It supplies goods to the JD fashion stores and has sales of £400m a year.