LONDON, April 24 — British sports retail group JD Sports Fashion on Tuesday announced the purchase of US peer Hibbett for US$1.1 billion (€1.3 billion).
JS Sports has “entered into a binding agreement to acquire 100 per cent of the outstanding share capital” of Hibbett for US$87.50 per share in cash, it said in a statement.
The transaction, which is expected to complete in the second half of the year, sent JD’s share price jumping 3.4 per cent to 122.45 pence in late afternoon London deals.
“This acquisition is in line with our strategic priorities and is a very important transaction for our strategic and financial development,” said JD Sports Fashion chief executive Regis Schultz, adding it would accelerate growth plans.
Alabama-based Hibbett has 1,169 stores across 36 states.
The purchase comes after JD Sports Fashion had in January cut its annual profit forecast, sending shares diving at the time.
The group blamed the downgrade on factors including cautious consumer sentiment, accounting changes, falling interest income and high infrastructure costs.
“UK retailers haven’t always fared too well in the States, but JD’s 2018 acquisition of Finish Line has proved a rare success story,” said Russ Mould, investment director at stockbroker AJ Bell, in response to Tuesday’s acquisition.
“This latest deal is for an established brand which dates back to the 1940s.
“Time will tell if this was the right use of capital over and above further returns to shareholders or buying back stock after a difficult period for the share price.”
Nasdaq-listed Hibbett saw its stock soar 19.2 per cent mid session to US$86.40 in New York. — AFP
