JD Sports has made a recommended cash offer for embattled counterpart Footasylum.
In recent weeks JD has already built up a substantial stake in Footasylum, and the price values the AIM-listed trainer specialist at up to £90m.
Footasylum floated in 2017 when it was valued at just over £170m, but has performed disastrously since. The retailer, itself built up by JD Sports founders John Wardle and David Makin, warned on profits last autumn and again in January this year.
JD Sports executive chairman Peter Cowgill said: “We are pleased to make this offer for Footasylum, which is very complementary to our 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.”
Footasylum chair Barry Bown said: “The Footasylum board has concluded that the offer represents the best strategic option for Footasylum and its employees.
“It believes the offer fairly reflects Footasylum’s current market position and prospects on a standalone basis and, as such, that Footasylum shareholders should be given the opportunity to realise value from the offer.”
Footasylum sells “on-trend” product ranges – own-label and third-party brands – for 16- to 24-year-old customers.
In January it said ”significant discounting and promotional activity across the sector” had undermined its performance. JD began stakebuilding the following month when it took an 8% holding.