Good morning!

Another day, another clarification statement from Sports Direct. This latest one seeks to justify the property acquisition announced yesterday. This excerpt strikes me as very odd:

...The deal vindicates the Group's faith in Michael Murray, who has successfully played a pivotal role executing the property strategy. This is one of the hottest freehold sites in London, superbly located in the mid-section of Oxford Street to the east of Oxford Circus...

Mr Murray is of course the boyfriend of Mike Ashley's daughter, and is on a controversial deal whereby he receives 25% of the uplift in value on properties he sources. He has little prior experience in commercial property, according to an article in the Telegraph. So this deal is quite obviously a mechanism to enrich an individual, and has little to no commercial rationale. That would be fine if Mad Mike owned 100% of the company, then he could do as he wishes. However, as a listed company, it's just the latest abuse of his controlling shareholding.

Furthermore, I fail to see what value Mr Murray has added. Any fool can go to property agents, wave a chequebook, saying they've got £108m to spend, and hey presto a prime site is found for you.

It's not clear what part of the Guardian article is supposedly inaccurate. Hardly anyone in the private sector finance world reads the Guardian, so in putting out an RNS rebutting this article, Mad Mike has actually just drawn attention to it. Yet another own goal from almost certainly the large company with the worst corporate governance imaginable.

That said, I still think Sports Direct is quite a good business, hence why I personally hold a long position in it.


Premier Foods (LON:PFD)

It's not a stock that I follow, but a reader mentioned it recently.

The bid approach has fallen through - see this announcement today. The potential bidder conducted due diligence, but felt that it was not able to make an offer, saying:

McCormick has, after careful consideration, concluded that it would not be able to propose a price that would be recommended by the Board of Premier Foods while also delivering appropriate returns for McCormick shareholders. 

That's clearly bad news for the shares, and they're down 25% today to 42.5p. It looks as if PFD management tried to get too clever on price, over-playing their hand…

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