A brief but significant chess match unfolded behind closed doors this week in the U.K. as Mike Ashley, the founder of U.K. sporting goods retailer Sports Direct, attempted to use his deal-breaking 29.9% stake in Umbro to fortify negotiations with Nike, Inc. In October, Nike bid £285 million ($565 million) for Umbro, but needs support from holders of 75% of the Umbro stock to secure the deal.  Sports Direct and JJB Sports – their rival, which owns over 10% of Umbro – were reportedly concerned that supplier terms would deteriorate if Nike closes the deal to acquire Umbro.


At the beginning of the week, when Sports Direct published interim financial results, Ashley declined to comment on Nike's bid beyond stating that he has held talks with the U.S. company. However, later, a spokesperson for Ashley said that he is not opposed “in principle” to Nike's buyout of Umbro, but that should not be interpreted as a definite vote in favor of Nike's offer.


On Friday, Nike acquired 67% of Sports Direct’s stake in Umbro, representing 19.9% of the company’s stock for £56.1 million ($115 mm). The shares were purchased at 193.06 pence per share ($3.83), which is the same amount as the all-cash offer price Nike announced in October.  Sports Direct International also gave Nike an irrevocable undertaking to vote its remaining 10% stake in Umbro in favor of Nike’s acquisition of the soccer company, even if a competing offer for Umbro is announced. Sports Direct said that proceeds from the sale would be used to pay off debt.


>>> Looks like Sports Direct will need the money…