REG - JD Sports Fashion - Update on Iberian Sports Retail Group, S.L.

JD Sports FashionAnnouncement

07/07/2023 07:00

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RNS Number : 2657F  JD Sports Fashion Plc  07 July 2023

 

7 July 2023

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Not for release, publication or distribution, in whole or in part, in or into
any jurisdiction where to do so would constitute a violation of the relevant
laws of such jurisdiction

JD Sports Fashion Plc

 

Update on Iberian Sports Retail Group, S.L. ('ISRG')

 

Further to the announcement on 9 May 2023, JD Sports Fashion Plc ('Group' or
'Company') announces its intention to acquire the remaining 49.98% shares in
ISRG ('Transaction') that are currently held by Balaiko Firaja Invest, S.L.
and Sonae Holdings, S.A. (together the 'Minority Parties') for total cash
consideration of €500.1 million which will be funded from the Group's
existing available cash resources. Upon completion, the Group will own 100% of
ISRG.

 

Information on ISRG and rationale for the Transaction

 

ISRG currently operates more than 460 stores across Europe including JD in
Iberia, Sprinter in Spain, Sport Zone in Portugal and Aktiesport and Perry
Sport in the Netherlands. ISRG also has a 98% holding in the Deporvillage
online business and a 50.1% holding in the Bodytone fitness equipment
business.

 

A summary of the key financial information relating to ISRG for the financial
years ended 31 January 2022 and 31 January 2023 is set out below:

 

                                 Year ended 31 January 2022    Year ended 31 January 2023
                                 Audited                       Unaudited
                                 €m                            €m

 Consolidated revenues           1,037.8                       1,239.3

 Consolidated profit before tax  73.2                          96.6

 Consolidated gross assets       659.4                         767.7

 

We believe that there are opportunities to continue to develop Sprinter and
Sport Zone and that the ISRG team in Iberia also have an important part to
play in the further development of the JD fascia in Iberia and beyond.

 

Related Party Transaction

 

As Sonae Holdings, S.A. and Balaiko Firaja Invest, S.L. are 29.99% and 19.99%
shareholders of ISRG respectively, each of the Minority Parties is deemed to
be a related party of the Company for the purposes of the Listing Rules. The
Transaction is therefore considered to be a related party transaction and, in
accordance with Listing Rule 11.1.7, is conditional upon the approval of an
ordinary resolution ('Resolution') by the Company's shareholders at a General
Meeting.

 

An explanatory circular containing a Notice of General Meeting will be sent to
shareholders in due course. The Board currently anticipates that this General
Meeting will be held in September 2023.

 

The Transaction is supported by the Board of the Company who intend to
recommend that shareholders vote in favour of the Resolution at the General
Meeting to be convened in due course. In this regard, all the Directors who
hold ordinary shares of 0.05p each in the capital of the Company ('Ordinary
Shares') have confirmed their intention to provide an irrevocable undertaking
to vote in favour of the Resolution in respect of their respective holdings
of, in aggregate, 1,517,291 Ordinary Shares, representing approximately 0.0%
of the Company's issued share capital.

 

Furthermore, Pentland Group Limited has also confirmed its intention to
provide an irrevocable undertaking to vote in favour of the Resolution in
respect of its entire holding in the Company, representing approximately 51.6%
of the Company's issued share capital.

 

Accordingly, the Company has, in aggregate, received confirmations of an
intention to provide irrevocable undertakings to vote in favour of the
Resolution in respect of 2,677,908,486 Ordinary Shares, representing
approximately 51.6% of the Company's issued share capital.

 

Completion of the Transaction

 

No antitrust filings will be necessary to complete the Transaction.
Accordingly, upon approval of the Resolution by the Company's shareholders,
the Group currently expects the Transaction to complete in October 2023.

 

Régis Schultz, CEO of the Group, said:

 

"At our Capital Markets Event earlier in the year, we emphasised the benefit
of having strong complementary concepts to support our 'JD first' global
growth strategy. ISRG is a highly successful business and one of the leading
players in sports retail in Iberia. By bringing the two businesses closer
together, there is significant potential for accelerating growth.

 

"We sincerely thank the minority shareholders, Balaiko and Sonae, for their
important contributions to the business during our time as partners."

 

Enquiries:

 

JD Sports Fashion Plc
                                 Tel: 0161 767 1000

Andy Higginson, Chair

Régis Schultz, Chief Executive Officer

Neil Greenhalgh, Chief Financial Officer

Theresa Casey, Legal Counsel & Company Secretary

Alison Lees, Director of Investor Relations and Treasury

 

FGS Global
 
 
Tel: 0207 251 3801

Rollo Head

Jenny Davey

James Thompson

 

This announcement contains information which is deemed by the Company to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014. Upon the publication of this announcement via the
Regulatory Information Service, this inside information is now considered to
be in the public domain.

 

This announcement does not constitute or form part of any offer, invitation to
sell, otherwise dispose of or issue, or any solicitation of any offer to
purchase or subscribe for, any shares or other securities nor shall it or any
part of it, nor the fact of its distribution form the basis of, or be relied
on in connection with, any contract commitment or investment decision.

 

This announcement has been prepared solely for the Transaction referred to in
this announcement. A shareholder circular will be published by JD Sports
Fashion Plc in connection with the Transaction in due course.

 

The person responsible for arranging the release of this information on behalf
of the Company is Theresa Casey, Company Secretary.

 

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