JD Sports founder slashes stake
Takeover talk surrounded the JD Sports chain today after its founder slashed his shareholding nearly in half.
John Wardle lowered his stake in John David Group to 14.6% by selling 5.4 million shares to a company owned by clothing maker Pentland Group.
The move fuelled speculation that JD could be the next retailer to be taken private, although analysts played down the likelihood of an immediate bid.
Mr Wardle stressed his commitment as a director of the group and said selling the shares allowed him to diversify his investments as he moved towards retirement.
London-based Pentland owns clothing and footwear brands such as Kickers, Speedo, Berghaus and Red or Dead.
The business has been run by the Rubin family since 1932 and employs 2,000 people worldwide, including at offices in Australia, Vietnam, Hong Kong and Italy.
A Pentland spokesman said: “Obviously we know the business and industry well, so this was an attractive investment opportunity.”
Analysts said the disposal of shares by Mr Wardle would fuel speculation that the company was up for sale.
But a 3% fall in JD shares today reflected the view that an imminent bid was unlikely.
Investec analyst Mark Charnock said the intentions of Pentland were not immediately clear.
“With brands such as Kickers and many footwear licences such as Lacoste and Ted Baker, it might wish to secure or influence its retail distribution channels,” he said.
It was likely that Pentland had secured the option to buy the remaining shareholding of Mr Wardle should he choose to sever ties with the group he set up in 1981, Mr Charnock added.
Attention would now switch to the intentions of co-founder David Makin, who analysts believe is also willing to sell part of his 21% stake.
Rhys Williams, of stockbrokers Seymour Pierce, said: “We have been hearing whispers for a while that Mr Wardle and Mr Makin were interested in selling a position, though rumours were for a larger stake than this.”
The trading performance of John David Group has been hit by problems integrating the 209-strong chain of First Sport stores, which it purchased in May 2002.
Pre-tax profits during the year to January 31 fell 80% to £2.1m (€3m) while a boardroom shake-up saw executive chairman Roger Best replaced by former finance director Peter Cowgill in March.
The group, based in Heywood, Lancashire, has 8,500 staff working in 359 stores under the JD Sports, Athleisure, Open Nike and Size? brands.
