Three months after Sports Direct International (SDI), the leading British sports retailer and wholesaler, acquired a stake of about 28.5 percent in Blacks Leisure, the Office of Fair Trading (OFT) is considering if this has led to what it describes as a “relevant merger situation;” After several months of uncertainty, the shares were formally transferred from Kaupthing Singer & Friedlander to Sportsdirect.com Retail Limited in February. As the OFT points out, this company is owned by SDI, which is also the owner of Field & Trek, an outdoor retailer. Should the OFT conclude that this situation skews market competition, it could be referred to the Competition Commission. Taken over by SDI in 2007, Field & Trek only has a few stores left, but the name is used for outdoor corners in Sports Direct stores. The OFT’s formal invitation to comment came just before shareholders approved an alternative proposal by the management of Blacks Leisure to raise £19.7 million. At the general meeting held yesterday, 62 percent of the votes were in favor of the resolutions, which called for the issue of up to 39,281,011 ordinary shares of one penny each for 54 pence per share, cash. An earlier attempt to raise capital, requiring approval by shareholders representing 75 percent of Blacks Leisure’s capital, had been thwarted by SDI. This vote required only a simple majority. Blacks’ chief executive, Neil Gillis, noted that when SDI interests were excluded from the vote tally, “99.9 percent of the remaining shareholders who voted, voted in favor.” Trading in the new shares is expected to begin on Monday. An earlier attempt to raise capital, requiring approval by shareholders representing 75 percent of Blacks Leisure’s capital, had been thwarted by SDI, but the new scheme only required a simple majority of the votes. Furthermore, SDI’s stake in Blacks was reduced to 27.15 percent last month after VF Corporation bought warrants in Blacks and converted them into shares.
