Sports Direct confirms interest in Blacks Leisure bid

Confirmation of its takeover interest comes a week after Sports Direct -controlled by Newcastle United owner Mike Ashley - scuppered fundraising plans being put forward by Blacks.

Sports Direct had earlier snapped up 28.5per cent of Blacks shares and its aggressive moves sparked speculation it was planning a bid for its high street rival.

In light of the Sports Direct takeover interest, Blacks said it would now look to secure an alternative fundraising to support its recovery efforts, which would only require 50 per cent shareholder approval.

Blacks, which operates its own brand shops as well as the Millets chain, was last week forced to adjourn a shareholder ballot on a 20 million fundraising amid tense negotiations with Sports Direct.

It planned to use the funds on up to 35 new stores and the refurbishment of existing sites as part of a revival plan.

Blacks needed 75 per cent shareholder approval for the fundraising to go through, but would have been unable to see it passed without the backing of major investor Sports Direct.

Blacks said it had held "a number of discussions with Sports Direct" since the meeting was postponed.

It added that following news of Sports Direct's acquisition aims, it "intends to pursue an alternative fundraising for the company, but one which will involve only an ordinary resolution being passed - requiring the support of a simple majority of shares being voted on the resolution - in the absence of any concrete takeover proposals from Sports Direct that the board feels that it can recommend."

Sports Direct had vowed to vote down the original fundraising when it secured the stake in Blacks.

It effectively paid for the shares twice after its Sportsdirect.com retail business bought the Blacks stake and an 11 per cent holding in JD Sports Fashion from Ernst & Young, the administrator of collapsed bank Kaupthing Singer & Friedlander last week.

It had been locked in a dispute with Ernst & Young over ownership of the holdings since October 2008, with litigation on the issue set to continue despite the shares acquisition.

Blacks has meanwhile suffered a torrid past couple of years, leading to a restructuring and the closure 87 loss-making stores in the fourth quarter of 2009 after securing a rescue deal with its landlords.

It has since reported improved trading and now wants funds to refurbish its core estate and reopen shops in areas where it has closed stores that it felt were subject to high rents and therefore loss-making despite strong sales.

The company has 208 stores under the Millets brand and another 92 Blacks shops.

It employs around 3,500 store staff and 450 people at its head office and distribution centre in Northamptonshire.