JJB Sports shares suspended as administration looms

 

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Trading of shares in JJB Sports has been suspended as the struggling sports clothes and equipment retailer prepares to call in the administrators.

The firm said it would continue to trade through all of its outlets while it readies a widely anticipated pre-pack administration.

The process will wipe out the value of JJB's existing shares and enable it to write off much of its debts.

The fate of its 180 stores and 4,000 employees has yet to become clear.

JJB Sports

Founded by Dave Whelan in Wigan in 1971

The name comes from JJ Broughton, who in the early 1900s opened what would go on to become Mr Whelan's first shop

In 1994 the business was floated on the London Stock Exchange

Buys then rival Sports Division in 1998

Dave Whelan leaves the business in 2007, as Chris Ronnie and Exista buy his 29% stake

The business currently has 180 stores and 4,000 employees

KPMG are expected to be appointed to handle the formal administration process once terms of the business' sale have been agreed with a potential buyer.

Until then, JJB said all of its outlets would remain open for business as usual.

JJB Sports announced at the end of August that it was seeking a buyer to rescue the firm.

Although the Wigan-based retailer received a number of offers, none of its suitors was interested in buying the company as a whole, but instead made offers for parts of its business, assets and brands.

The failure of the sale process was widely anticipated, and JJB's shares have been valued at less than a penny each since the decision to seek a suitor was first announced.

In the summer of 2007, its shares were trading at just under £25 each.

A likely buyer for much of the remaining business is JJB's far more successful rival Sports Direct, although further expansion by the competitor firm may need approval from the competition authorities.

By effecting the sale through a "pre-pack" - or fully pre-arranged - administration, JJB will be able to write off any of its debts that the buyer is unwilling to assume, and that cannot be repaid from the sale proceeds.

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