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JD Sports mulls £400m share placing

The funds will reportedly be used to ‘bolster a takeover war chest’ following the recent acquisition of Shoe Palace

JD Sports Fashion is reportedly eyeing up an equity sale of around £400m as it “eyes further opportunities” to expand across the globe. 

According to Sky News, the group’s board is considering launching the placing as early as this week, with insiders stating that the amount will be “in the region” of £400m, with no confirmed price as of yet. 

The funds will reportedly be used to “bolster a takeover war chest” following the recent acquisition of Shoe Palace, which was acquired by the group in a $681m (£491m) deal last month. 

Insiders told Sky that the equity sale was “by no means certain to proceed”, adding that directors within the group “retained the option of calling a halt to their deliberations”.

The move would come one month after JD Sports pulled out of the race to take over Debenhams, whose brand and website have now been sold to Boohoo in a deal announced yesterday. 

The group was also in the running to acquire the Topshop brand alongside US-based Authentic Brands Group (ABG). Reports have since stated that Asos is now a “frontrunner” to acquire the brand, however. 

In an update to the London Stock Exchange, the digital fashion retailer confirmed that it was in “exclusive talks” with Arcadia administrators to purchase the Topshop, Topman, Miss Selfridge and HIIT brands. 

Nonetheless, analysts predict that ABG and JD Sports will “make a fresh approach” if a transaction cannot be concluded with Asos, according to Sky.

Sky noted there was “unlikely to be a shortage of plausible acquisition targets” for JD Sports, adding that the group would “enjoy strong backing” from shareholders if an equity sale goes ahead. 

In a statement published today (26 January), the board of JD Sports said it “notes the recent press speculation concerning the possibility of the group undertaking an equity capital raise”.

It added: “The board confirms that it is exploring additional funding options with a view to increasing its flexibility to invest in future strategic opportunities and that this may involve a non preemptive equity placing.  A further announcement will be made as and when appropriate.”

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