Blacks tries to keep £22m deal on track

David Hellier
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LAST MINUTE negotiations were taking place yesterday in an attempt to
avoid a bitter clash between shareholders at today’s meeting of outdoor clothing specialist group Blacks.

Blacks shareholders are due to vote on a £22m refinancing of the group – but the whole exercise has been thrown into jeopardy because of a surprise purchase from an administrator by Mike Ashley’s Sports Direct of 29.9 per cent of Blacks’ shares, enough to vote the desperately required proposal down.

There are fears that Sports Direct will vote against the Blacks finance plan, putting at risk the group’s recovery plan.

The retailer has only recently come out of a creditors’ voluntary arrangement and the new funds are required by the company for its turnaround plan which involves the opening of new stores and some refurbishment of existing ones.

Sports Direct’s advisers were in meetings with Blacks’ advisers for most of yesterday, hoping to hatch a deal that would avoid a bitter confrontation – and a no vote – at today’s meeting.

One possibility might be an adjournment of today’s meeting ahead of the crucial vote. That would enable both Sports Direct and Blacks to work on a proposal that might be acceptable to both sides.

The current refinancing proposal was put together before Sports Direct took possession of its stake, so it has no capacity for Sports Direct to participate in it.

The current refinancing deal needs a 75 per cent vote to go through and Sports Direct has enough votes to prevent it going ahead, hence the need for some sort of compromise deal.