Struggling British retailer Blacks Leisure was forced to postpone its annual meeting indefinitely last week when a rival chain-opposed to its turnaround plans-acquired a 28.5% stake in the company.
On Monday, just two days before Blacks Leisure shareholders were scheduled to vote on the plan, a unit of Sports Direct International Plc, which is owned by investor Mike Ashley, confirmed it had acquired the stake from administrators of a bank in Iceland. Sports Direct, which is the United Kingdoms largest sporting goods retailer, then said it would vote its shares against the struggling retailers proposal to raise £20.4 million ($32.6 mm) through a stock sale, which must be approved by 75% of the companys shareholders. The disclosure forced Blacks Leisure to cancel its Wednesday meeting pending negotiations with Sports Direct.
Sports Directs intervention marked the latest in a series of ups and downs for Blacks Leisure, which operates the Blacks Outdoor and Millets chains. The companys creditors overwhelmingly approved a restructuring plan in late November that allowed the retailer to pay off landlords at 101 stores it closed last year at discounts and avoid the British equivalent of bankruptcy. Less than two months later, Blacks announced that unexpectedly strong performance in the fourth quarter would enable it to raise £25 million to £32 million from a stock offering in the first quarter.
Last week, British press reports quoted analysts who speculated that failure to issue the shares could force Blacks into a shotgun wedding with Sports Direct.
