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JD Sports To Combine Iberian Business With Sonae's Sport Zone

LONDON (Alliance News) - Sports retailer JD Sports Fashion PLC said Thursday it has exchanged ...

Alliance News 14 September, 2017 | 8:41AM
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LONDON (Alliance News) - Sports retailer JD Sports Fashion PLC said Thursday it has exchanged conditional contracts to combine its existing Iberian business JD Sprinter Holdings 2010 SL with Sport Zone, a subsidiary of Sonae-SPGS, SA.

As part of the transaction, JD will acquire a shareholding in JD Sprinter of around 2.4% from Balaiko Firaja Invest SL for EUR6 million. Balaiko is the investment vehicle for the current minority family shareholder in JD Sprinter, and currently owns an effective shareholding of approximately 33% in the business.

Sonae, which wholly owns Sport Zone, will receive as consideration an approximate shareholding of 30% of JD Sprinter and cash of EUR7.1 million. JD said there is also a contingent consideration of up to EUR23.5 million payable to Sonae by JD Sprinter in the future based upon and matched by future valuation creation if above expectations.

JD said a number of put and call options are also included in the transaction, allowing either them, Sonae, or Balaiko to have future exit opportunities. It said the value of these options are subject to independent valuations.

Once the transaction is completed, JD Sprinter will have as shareholders JD, Sonae, and Balaiko, with shareholdings of approximately 50%, 30%, and 20% respectively.

JD said, upon completion, the combined company will become the second largest sports retailer in Iberia with a combined turnover in excess of EUR450 million, with 204 stores in Spain and 107 in Portugal.

JD's Executive Chairman Peter Cowgill commented: "Sport Zone is very complementary to our existing businesses in Iberia. We believe there are significant opportunities for synergies to be created to improve operational efficiencies and profitability through the combination of the very experienced and knowledgeable management team at Sport Zone and our own expertise as we continue to strengthen JD's presence in Europe."

Shares in JD Sports were down 0.6% at 373.28 pence early Thursday.

By George Collard; georgecollard@alliancenews.com

Copyright 2017 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
JD Sports Fashion PLC 338.30 GBX -0.82 -
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