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JD Sports to buy Footasylum for £90m | JD Sports to buy Footasylum for £90m |
(30 minutes later) | |
JD Sports has made an offer to purchase clothing and shoe retailer Footasylum for £90.1m. | JD Sports has made an offer to purchase clothing and shoe retailer Footasylum for £90.1m. |
JD Sports already owns 8% of Footasylum after buying a stake in February. | JD Sports already owns 8% of Footasylum after buying a stake in February. |
Footasylum has been going through a difficult period. In September, it warned of weaker than expected profits following poor trading over the summer. Shares more than halved after that warning, to trade at 40p. | Footasylum has been going through a difficult period. In September, it warned of weaker than expected profits following poor trading over the summer. Shares more than halved after that warning, to trade at 40p. |
The cash offer values each Footasylum share at 82.3p. | The cash offer values each Footasylum share at 82.3p. |
That is a near 80% premium on Friday's closing price of 46.5p. Footasylum shares jumped on Monday following news of the deal. | |
Footasylum management has agreed to the offer, but the deal still requires shareholder approval. | |
JD Sports said the two businesses would complement each other. Footasylum is focused on adults aged 16-24, while JD Sports says its target audience is slightly younger. | |
"This consolidation of the sector shows JD Sports resilience and customer appeal in an otherwise fairly depressing retail landscape," said Catherine Shuttleworth, chief executive of shopper marketing agency Savvy. | |
"By merging Footasylum into their ecosystem, this acquisition looks like a smart move." | |
The two companies have a shared history, JD Sports co-founder David Makin established Footasylum in 2005. | |
In 2008, John Wardle, the other co-founder of JD Sports, joined Footasylum and was chief executive for seven years, before becoming executive chairman in 2015. |