STRUGGLING outdoor equipment retailer Blacks Leisure yesterday put itself up for sale, sending its shares plummeting as it admitted it had failed to find an alternative route out of it funding troubles.
Shares in Blacks, which have lost 90 per cent of their value since the start of the year, extended losses to close at just 1.88p yesterday after the company acknowledged shareholders could be wiped out if the business was sold.
“Given the current level of debt within the group there can be no assurance that any sale would attribute value to the ordinary shares of the group,” the company said yesterday.
At its current share price, Blacks has a market capitalisation of just £1.6m, vastly overshadowed by its £36m debt pile, and just a fraction of the £152m it was worth back in 2006.
The company, which owns brands including Millets and Peter Storm, said yesterday it was inviting offers, “most likely to involve a sale of the company or sale of one or more of the group’s brands”.
It added that it was in “constructive discussions” with its main lender, Bank of Scotland, and that it was hoping to complete any sale process by January.
Blacks’ ongoing woes were cemented by a profit warning less than two weeks ago, when the retailer warned that trading conditions had weakened over the past few weeks, and it expected full-year results to fall below expectations.
MEET THE ADVISERS
ADVISING Blacks Leisure Group on its sale process is KPMG. Heading up the team is David McCorquodale.
McCorquodale is a partner at KPMG and head of the company's European consumer markets arm, a position he has held since 2006.
He started with KPMG in 1984 and has worked in corporate finance since 1987, advising on divestitures, acquisitions and fund raising. He has worked on the sale of Card Factory, Dreams, Helly Hansen, Independent Pharmacy Care Centres, Britax Childcare and Maplin Electro-nics.
He also handled the buyout of Whyte & Mackay and advised the purchaser on the public to private buyout of the London toy shop Hamleys.
McCorquodale spent two years on secondment to the Takeover Panel, the UK authority in charge of regulating public takeovers, from 1990 to 1992.
He was head of consumer markets for the UK at KPMG from 2002 until he was promoted to his current role.
By Caty Hirst