Sports Direct takes up 19% stake in online specialist Findel

United Kingdom retailer Sports Direct (OTCPK:SDISY, OTC:SDIPF) acquired an 18.9% stake in Findel today in a move that also gives the company a piece of Kitbag.

Analysts speculated that Sports Direct, controlled by Newcastle United owner Mike Ashley, was buying the stake to disrupt the sale of Kitbag, which is expected to fetch around £3m.

Findel shares were up 15% to 232.00 pence on Tuesday morning, the best performer in the FTSE All-Share by a margin.

Kitbag, a retail partner for leading football clubs and Formula 1, has made losses for several years, with Findel first announcing it was thinking about selling it last year.

Findel disclosed in a regulatory filing that another third party is also interested in Kitbag.

A person close to Sports Direct said that the stake had been bought for strategic reasons and the company “looked forward to working with Findel’s management as a supportive shareholder”.

Findel this morning said in a statement: “The Company has received notification from Sports Direct worldwide PLC of its acquisition of a major interest in the shares of the Company”.

A deal has been agreed subject to terms but Findel emphasised there can be no certainty it will be closed.

Then, David Sugden, Findel Executive Chairman said “Kitbag has delivered a substantial recovery in its underlying operations and contract base after the renegotiation of legacy contracts, and has started to capitalise on the significant worldwide growth opportunities open to the business”.