JD Sports to buy Footasylum for £90m
JD Sports has made an offer to purchase clothing and shoe retailer Footasylum for £90.1m.
JD Sports already owns 18.7% of Footasylum - buying a stake last month.
Footasylum has been going through a difficult period. In September, it warned of weaker than expected profits following poor trading over the summer. Shares more than halved after that warning, to trade at 40p.
The cash offer values each Footasylum share at 82.5p.
That is a near 80% premium on Friday's closing price of 46.5p. Footasylum shares jumped on Monday following news of the deal.
Footasylum management has agreed to the offer, but the deal still requires shareholder approval.
JD Sports said the two businesses would complement each other. Footasylum is focused on adults aged 16-24, while JD Sports says its target audience is slightly younger.
The history of JD Sports and Footasylum
- JD Sports was founded in 1981 with a single store in Bury
- The company now has 2,400 stores
- It has outlets in Spain, France and the Netherlands
- It owns the shoe store Size, the sportswear brand Kukri and recently bought the US chain Finish line
- Footasylum was established in 2005
- The company has over 65 High Street stores across the UK
- It was founded by David Makin, one of the two co-founders of JD Sports
- The company is run by Makin's 31-year-old daughter, Clare Nesbitt
"This consolidation of the sector shows JD Sports resilience and customer appeal in an otherwise fairly depressing retail landscape," said Catherine Shuttleworth, chief executive of shopper marketing agency Savvy.
"By merging Footasylum into their ecosystem, this acquisition looks like a smart move."
The two companies have a shared history, JD Sports co-founder David Makin established Footasylum in 2005.
In 2008, John Wardle, the other co-founder of JD Sports, joined Footasylum and was chief executive for seven years, before becoming executive chairman in 2015.