US Retailer Dick's Sporting Goods has agreed a £20m investment in the UK's struggling JJB Sports.
Dick's, the largest athletic chain in the US, will buy $18.75m in junior secured convertible notes and another £1.25m in shares of the Wigan based sporting retailer, the companies said in a statement Thrusday.
As well as taking at least one seat on JJB's board, Dicks will have the option to purchase another £20m of notes in 2013, which would see it becoming a controlling shareholder with 61 percent.
JJB, which managed to raise £65m in capital from its shareholders to avoid administration, has been struggling with a decline in sales. It had revealed it was in talks with a "strategic partner" - now revealed to be Dick's - on March 3.
"We believe that JJB is a strong company with the potential to become a leading multi-channel sporting goods retailer both in Britain and through Europe," said Edward W. Stack, chairman and chief executive of Dick's.
"We look forward to providing the company with financial support."
Keith Jones, chief executive of JJB, said the company believed the investment package would "provide a real opportunity to accelerate JJB's turnaround".
JJB's share price saw a 71.8 percent increase in the two days following announcement of a partner, closing on March 5 at £17.34 a share.
Dick's' shares have gone from strength to strength in 2012, increasing 36 percent in 2012 and closing at £30.55 ($48.60).
JJB will be keen to promote its "strategic alliance" with Dick's as a new dawn as former chief executive Chris Ronnie faces charges of fraud and money laundering by the Serious Fraud Office.
Ronnie, who headed the company from 2007 to 2009, was charged over contracts he entered into during his time with JJB alongside David Ball, owner of Fashion & Ball, one of JJB's suppliers.
Ronnie, 50, was charged on April 4 with offences relating to money laundering, fraud failing to disclose interests in contracts entered into by the company. Ball, 51, was handed three charges for supplying false information.
Anthony Barnfather, a lawyer representing Ronnie, told Bloomberg:" [Ronnie] has fully cooperated with the Serious Fraud Office investigation and is surprised and disappointed by the decision.
"He strenuously denies the charges, has always maintained his innocence and is confident his position will be vindicated in due course."
The charges followed an investigation into anti-competitive behaviour between JJB and rivals Sports Direct. Accusations of inappropriate relationships between sports retailers gained further momentum with the revelation that Sir David Jones, Ronnies' successor as CEO, had accepted a personal loan of £1.5m from Sports Direct founder Mike Ashley.