JD ends takeover talks with JJB

JD: ends takeover talks with JJB Sports
JD: ends takeover talks with JJB Sports

JD Sports has halted takeover talks with JJB Sports following a financial restructure at the beleaguered JJB.

JD Sports and JJB Sports confirmed they were in possible takeover discussions last month.

JJB Sports was known to be in danger of breaking its banking covenants, after suffering a poor Christmas, which was blamed on the snow.

JJB Sports examined alternatives to a takeover, and at a recent general meeting shareholders, including the Bill and Melinda Gates Foundation, approved additional funding worth £31.5m.

The company will also close 43 of its 246 stores by April 2012 in a drastic cost-cutting exercise. Another 46 have been earmarked for closure by 2013 if trading conditions do not improve.

JD Sports entered negotiations with JJB before 2 February, when JJB issued its prospectus.

A JD Sports statement said: "Despite requests made with a view to enabling it to put forward alternative proposals for the future of the JJB business, since the beginning of February 2011 JD Sports Fashion has received no further information whatsoever from JJB Sports."

JJB's restructuring decisions have now persuaded JD Sports to drop its bid, and they are now prohibited from making another bid for six months, unless a new bidder emerges.

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