Blacks Leisure Group, Sports Direct shares rise on FTSE 250 and FTSE Fledgling

The outdoor leisure group which is listed on the FTSE Fledgling, rose a further 50 pence to 61.60 (+0.82pct), almost breaching Mike Ashley's offer, which they describe as "wholly inadequate".

Analysts are waiting in expectation of a further offer from the sportswear retailer who own 28.5 pct of Blacks Leisure, blocking their earlier fundraising plans to turnaround the group's 'Millets' and 'Blacks' outdoor chains.

"Following the announcement on 2 March 2010 by Sports Direct that it was evaluating a possible cash offer for the entire issued and to be issued share capital of Blacks, the Board of Blacks announces that it has received an indicative non binding offer from Sports Direct, which may or may not lead to an offer being made for the Company." Blacks said in a statement.

"The indicative offer is 62 pence in cash for each Blacks ordinary share which represents a premium of 3.33% to the closing mid-market price at the close of business on the day before receipt of the indicative offer. The making of the offer is stated to be subject to several pre-conditions, including the unanimous recommendation of the offer by the Board. The Board is of the view that one or more of these pre-conditions cannot be met."

"The Board, having consulted with its advisers, has rejected the indicative offer as being wholly inadequate."

"The Board has previously indicated that the proposed fundraising, due to be completed on 25 February 2010, would have provided capital to accelerate the final phase of the Group's Turnaround Plan which the Board and its advisers believe would have led to a substantial increase in shareholder value. The Board is of the view that, having blocked the proposed fundraising despite being offered full pre-emptive participation in it, Sports Direct is now attempting to transfer that potential shareholder value from shareholders to Sports Direct. Accordingly, the Board continues to consider the implementation of a fundraising for the Company to be in the best interest of shareholders as a whole and therefore intends to pursue, as soon as practicable, a pre-emptive fundraising which would be structured in such a way as to only require an ordinary resolution being passed (requiring a simple majority of shares being voted on the resolution)."

"This announcement has been made without the consent of Sports Direct. There can be no certainty that an offer will be made to shareholders or the terms on which any offer might be made." the statement concluded.

Sports Direct International plc also rose on the FTSE 250, by 0.30 pence (0.28 pct).