Ashley unveils Newcastle takeover bid

28 Apr 2008

By: Sport Industry Group

Mike Ashley, the billionaire owner of the Sports Direct retail group, has unveiled a £133.1m offer to takeover FA Premier League club Newcastle United.

Ashley, who floated his company earlier his year pocketing more than £900m in the process, has already bought a 41.6% stake in the club from majority stakeholder Sir John Hall for more than £55m.

Under stock exchange rules, Ashley's company now has to make a cash offer for the remaining shares – including a stake of around 29.8% belonging to chairman Freddy Shepherd.

Sports Direct confirmed that it values the remaining shares at the same price as it existing stakeholding.

The group runs the Sports World retail chain and Lillywhites, and its brands include Dunlop, Kangol and Karrimor.

Ashley bought his shares through his firm St James Holdings Limited (SJHL), which he established specifically for the purpose of investing in Newcastle.

Ashley’s surprise takeover bid effectively ends long-running speculation over the future owners of Newcastle with the Belgravia Group investment fund and hedge fund Polygon both previously linked to a buy-out.

In October 2006, Newcastle United announced a £12m financial annual loss after heavy investment in players and a fall in revenues due to its failure to qualify for Europe.

The result was a reversal in financial fortune for the Premiership club which made a £620,000 profit the year before.

Sports Direct has been the subject of rumours surrounding its poor management structure since it floated earlier this year with Ashley himself admitting that the company was ill-prepared for the flotation.