Companies

Sports Direct seeks ousting of Blacks board

Sports Direct has announced its intention to convene an EGM seeking the removal of the entire board of Blacks Leisure. Sports Direct will also propose a new board for the outdoor clothing company, and that any proposed disposal of Freespirit, the surf and skate ware division, be cancelled.

Blacks is currently carrying out a “strategic review” of Freespirit.

In response, Blacks said no decision has yet been made on whether to sell Freespirit, but if such a course was decided upon shareholder approval would be sought at an EGM, and Sports Direct would be free to vote as it wished.

Blacks added it is “extremely disappointing” the company’s largest shareholder has “embarked on such an unusual and disruptive course of action”.

Lombard in the Financial Times (23/24 June) commented that, rather than ask for a meeting and query the wisdom of selling Freespirit, Sports Direct founder Mike Ashley seems to have moved almost immediately to the nuclear option. Lombard said that Blacks is in difficulty, its shares are down, it has lost its chief executive and it needs to restructure, and suggested that Ashley would surely have been pushing at an open door if he had simply pressed for talks.

As it is, said Lombard, a half-proposal half-threat to remove the board without paying a premium for control risks alienating both investors and directors.

July 2007