Shares in Blacks Leisure have edged higher as the retail chain confirmed my colleague Zoe Wood's exclusive that rival Sports Direct International had made a 62p a share offer.
Blacks has rejected the cash bid, which values the company at £26m. The offer is at a miniscule premium to the current price, which has risen 0.5p to 61.5p. Blacks said the offer was the subject of a number of pre-conditions, including the unananimous recommendation by the Blacks' board: "The board is of the view that one or more of these pre-conditions cannot be met." I wonder which one in particular?
Last month Sports Direct blocked the company's plans to raise £20m, a move that would dilute Sports Direct's 28% holding. Blacks now wants to press on with a fundraising, but hopes to restructure it so it only needs majority approval rather than 75%, thus avoiding a repetition of the rejection. Blacks said the fundraising would have led to a substantial increase in shareholder value, adding:
The board is of the view that, having blocked the proposed fundraising despite beign offered full pre-emptive participation in it, Sports Direct is now attempting to transfer that potential shareholder value from shareholdes to Sports Direct.
Accordingly the board continues to consider the implementation of a fundraising for the company to be in the best interests of shareholders as a whole.
