Sports Direct considers £3.6m bid for stricken five-a-side operator

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Mike Ashley, founder and CEO of Sports Direct, outside the company's factory at its headquarters in Shirebrook, Britain. Photo: Darren Staples/Reuters

Sports Direct (SPD.L) tycoon Mike Ashley’s deal spree looks set to continue, as he eyes a bid for one of the UK’s biggest five-a-side pitch operators.

Sports Direct said on Monday it is considering a bid for Goals Soccer Centres, a football pitch operator currently struggling with an accounting scandal.

Sports Direct, which already owns a major chunk of Goals, said it had approached the company suggesting a 5p-a-share bid. That would value Goals at £3.6m.

Goals has been struggling with an accounting scandal that was uncovered earlier this year. The company said uncovered “improper behaviour” relating to accounts dating back to 2010 and Goals owes £12m in back tax. It has yet to file accounts for the year and former CEO Keith Rogers and former finance officer Bill Gow are both being investigated.

Goals shares were suspended in March and the business put itself up for sale last month. Shares are set to be delisted at the end of the month unless it can file accounts by then.

READ MORE: Sports Direct contacts government over auditor failure

Sports Direct said its possible offer would “provide shareholders with an exit and allow them to determine what is fair value and in their best interests.”

However, the bid is far below what Goals was worth when shares were suspended in March. Its share price then valued the business at just over £20m.

Sports Direct said Goals has not engaged with the company over the possible bid, despite being up for sale.

“Sports Direct has requested the board of Goals provide customary due diligence materials,” Sports Direct said.

“Despite the Possible Offer and request for information being communicated to the board of Goals on 5 September 2019, the board has so far failed to provide any such information to Sports Direct.

“Sports Direct urges the Goals board to engage with it in discussing the Possible Offer and providing the requested information.”

Sports Direct is already Goals’ largest shareholder, with a 18.93% stake in the business. If the takeover goes through, it would be the latest in a string of retail deals struck by Sports Direct founder and CEO Mike Ashley.

The discount sports retailer has in recent years bought bust department store House of Fraser and preppy retailer Jack Wills, as well as acquiring stakes in Game, French Connection, and Debenhams. Ashley’s deal making has been criticised by investors who see it as a sideshow to running Sports Direct.

Nick Bubb, an independent retail analyst, said Ashley’s deal making was like “trying to win a game of ‘Monopoly’ by buying the useless but cheap brown properties like Old Kent Road.”

Sports Direct said Monday’s announcement was not a firm offer and it would not necessarily make a bid for Goals.