J.D. Sports Fashion Plc, the parent of the J.D., Finish Line, DTLR, and Shoe Palace retail brands in the U.S. and others worldwide, reiterated its intention, first announced on May 9, to acquire the remaining 49.98 percent of shares in Iberian Sports Retail Group, S.L. (ISRG). The shares, are held by Balaiko Firaja Invest, S.L. and Sonae Holdings, S.A., will be purchased for total cash consideration of €500.1 million and funded from J.D.’s available cash resources. Upon completion, J.D. Sports Fashion Plc will own 100 percent of ISRG.
ISRG operates more than 460 stores in Europe, including J.D. stores in Iberia, Sprinter in Spain, Sport Zone in Portugal, and Aktiesport and Perry Sport in the Netherlands. ISRG also has a 98 percent holding in the Deporvillage online business and a 50.1 percent holding in the Bodytone fitness equipment business.
A summary of the financial information related to ISRG for the financial years ended January 31, 2022 and January 31 2023, is outlined in the chart below:
J.D. said it believes there are opportunities to continue to develop Sprinter and Sport Zone and that the ISRG team in Iberia also has a vital part to play in further developing the J.D. retail brand in Iberia and beyond.
As Sonae Holdings, S.A. and Balaiko Firaja Invest, S.L. are 29.99 percent and 19.99 percent shareholders of ISRG, respectively, each of these two minority parties is deemed to be a related party of the company for the Listing Rules. The transaction is therefore considered to be a related party transaction and, in accordance with Listing Rule 11.1.7, is conditional upon the approval of an ordinary resolution by the company’s shareholders at a general meeting.
An explanatory circular containing a Notice of General Meeting will be sent to shareholders. The Board anticipates that this General Meeting will be held in September 2023.
The transaction is reportedly “supported by the Board of the company who intend to recommend that shareholders vote in favor of the Resolution at the General Meeting to be convened in due course.” The company said all the directors who hold ordinary shares of 0.05p each in the capital of the company had confirmed their intention to provide an irrevocable undertaking to vote in favor of the Resolution in respect of their respective holdings of, in the aggregate, 1,517,291 Ordinary Shares, representing approximately 0.0 percent of the company’s issued share capital.
Furthermore, Pentland Group Limited reportedly also confirmed its intention to provide an irrevocable undertaking to vote in favor of the Resolution regarding its entire holding, representing approximately 51.6 percent of the company’s issued share capital.
Accordingly, the company has, in the aggregate, received confirmations of an intention to provide irrevocable undertakings to vote in favor of the Resolution in respect of 2,677,908,486 Ordinary Shares, representing approximately 51.6 percent of the company’s issued share capital.
J.D. reported that no antitrust filings would be necessary to complete the transaction. Accordingly, upon approval of the Resolution by the company’s shareholders, the Group expects the transaction to be complete in October 2023.
“At our Capital Markets Event earlier in the year, we emphasized the benefit of having strong complementary concepts to support our ‘J.D. first’ global growth strategy,” commented Régis Schultz, CEO of J.D. Sports Fashion Plc. “ISRG is a highly successful business and one of the leading players in sports retail in Iberia. By bringing the two businesses closer together, there is significant potential for accelerating growth. We sincerely thank the minority shareholders, Balaiko and Sonae, for their important contributions to the business during our time as partners.”
