JD Sports agrees to buy Footasylum for £90m
Written by Hannah McGrath
JD Sports has agreed to buy Footasylum in a £90 million deal.
The takeover of the High Street footwear retailer comes after the sportswear chain bought an eight per cent stake in Footasylum, sparking speculation that it would seek to acquire the company outright.
Under the terms of the deal, Footasylum shareholders will receive 82.5 pence per share, a 77 per cent premium on the share price before the agreement was announced.
A statement issued to the stock market announcing the terms of the offer read: “JD believes that Footasylum is a well-established business with a strong reputation for lifestyle fashion and, with its offering targeted at a slightly older consumer to JD's existing offering.”
Announcing the offer, Peter Cowgill, executive chairman of JD, said the acquisition would complementary to its existing businesses in the UK. “We believe that there will be significant operational and strategic benefits through the combination of the very experienced and knowledgeable management team at Footasylum and our own expertise."
The move follows Footasylum issuing a second profit warning in January after a difficult Christmas trading period and announcing a programme of cost cutting, despite a 14 per cent rise in total revenue to £102.3 million for the 18 weeks running up to December.
JD’s offer is conditional on JD securing no less than 90 per cent of Footaymlum shares, with a deal expected to be concluded in April or May 2019.