18th Jun 2014 16:41
LONDON (Alliance News) - The UK's biggest sporting goods retailer by revenue, Sports Direct International PLC, Wednesday said it has bought a 4.8% stake in recently-listed online sales retailer MySale Group PLC, and potentially wants to work with it on developing a Sports Direct offering in Australasia and Asia.
"Sports Direct looks forward to developing its relationship with MySale, including the potential to co-operate on significant collaboration and joint venture opportunities in Australasia and Asia," the company said in a statement.
"This partnership approach is consistent with Sports Direct's strategy in other regions and the group believes that MySale is ideally suited to help realise Sports Direct's multi-channel potential in Australasia and Asia," it said.
Online retailer Mysale Group, part owned by the wife of UK retailer Philip Green, joined a long list of retailers to float in London in 2014 at the end of May. However, the retailer saw its shares slide below its IPO price as dealings got underway on AIM Monday. The company had priced its IPO at 226 pence, giving it an initial market capitalisation of about GBP340 million. MySale shares closed 2.4% lower at 183.031 pence on Wednesday.
Mysale was launched in Australia in 2007 and has since expanded to New Zealand, southeast Asia, the US and UK. It is a so-called flash sales retailer - once a customer becomes an "exclusive" member, they get access to member-only fashion sales.
It had about 795,000 active members across eleven online sites on May 14, although it had 10.8 million registered members and is adding about 250,000 new members each month.
The acquisition is the third big investment Sports Direct has made in other retailers this year.
Back in April, Sports Direct bought up the remaining 11% stake in House of Fraser from Scottish business man Tom Hunter, after a subsidiary of Chinese conglomerate Sanpower Group Co Ltd bought up a 89% stake. The deal gave the 165-year-old retailer an enterprise valuation of GBP480 million.
Back in July 2011, Hunter sold an 80% stake in his fashion chains USC and Cruise to Sports Direct, for a total cash consideration of GBP7 million, while retaining a 20% shareholding and remaining as chairman of both companies.
House of Fraser threatened legal action against Hunter and billionaire Mike Ashley, the founder and deputy chairman of Sports Direct, claiming that pre-emption rights attached to the stake mean Hunter should have offered the shares first to the company?s other investors, which it believes has not been the case.
In January, Sports Direct sold a 4.6% stake it bought in struggling department store operator Debenhams PLC just three days after acquiring the stake, and replaced it with what was effectively a bet that the Debenhams share price would fall further. After selling the stake, it instead entered into an option agreement that will activate if Debenhams shares fall below a certain level in the future. Its maximum exposure to the option is about GBP64 million.
The statement by Sports Direct Wednesday was released after the market closed. Shares in Sports Direct closed 1.2% lower at 756.5 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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