Shares in JJB Sports have jumped nearly 30% on hopes its controversial restructuring plans will be passed by creditors and investors at meetings later today.
The struggling sports retailer is up 7.25p to 33.25p as it tries to reach agreement over a company voluntary arrangement, which would see landlords accepting a cut in rents by up to 55%. The company also wants to close 43 stores by April next year and possibly another 46 later, and hopes to raise around £65m with an equity issue. It is said to have the backing for this from key investors including billionaire Bill Gates.
Some landlords such as Hammerson and Peel Holdings have backed the CVA plans but others are said to be less supportive. Land Securities - which leases a handful of stores to JJB - has reportedly decided not to back the move, so the vote could yet prove a close one.
Commenting on the share price rise, JJB said it would not know the outcome of the meetings until the votes had all been counted, and currently expected to release the results later today. Analyst Nick Bubb at Arden said:
News that Land Securities will vote against has thrown the outcome into doubt. Note that the proposed £65m rescue fund-raising is conditional on this CVA plan getting landlord approval.
The big sports suppliers want JJB to survive, to avoid the industry being dominated by Sports Direct, but it is not clear that consumers do, given how badly the business is trading and the huge losses being incurred. Incidentally, JJB say that the six revamped stores are doing well, although the fact that they are trading 16% above the chain average means that their sales are actually only barely up on last year.
