JD Sports sells £464m of new shares to fund acquisitions

Peter Cowgill

Bury-based FTSE 100 retailer JD Sports Fashion Plc said on Thursday it sold 58.4 million new shares in the firm to raise £464.2 million.

Late on Wednesday, JD Sports had said it would sell the shares “in order to invest in the expansion of the group and to capitalise on acquisition opportunities, as it builds on the success of its international growth strategy …

The group’s global expansion strategy has been a major factor in the significant growth of the group’s profit before tax and exceptional items, which has increased from £100m in the year ended 31 January 2015 to £439m in the financial year ended 1 February 2020 …

“The directors of the group believe there are a number of potentially attractive acquisition opportunities that will become available in due course and which will continue to support the group’s successful global expansion strategy.

“The net proceeds of the placing, in conjunction with the group’s available cash resources (net cash of £1,000m at December 2020) and debt facilities (principally a £700m syndicated Revolving Credit Facility in the UK which is committed to 6 November 2024) will be used to capitalise on the acquisition opportunities available and invest further in the international expansion of the group.”

On Monday, JD Sports said it signed a “conditional agreement” to buy Baltimore-based DTLR Villa LLC for $495 million to further expand its presence in the United States.

The acquisition of DTLR is JD Sports’ second US purchase in less than two months after it bought West Coast-focused Shoe Palace in December.

In a stock exchange statement on Thursday, JD Sports said: “A total of 58,393,989 new ordinary shares in the capital of the company have been placed by Investec Bank plc and Peel Hunt LLP at an issue price of 795 pence per share.

“The placing shares represent approximately 6.0 per cent. of the existing issued share capital of the company and will raise gross proceeds of approximately £464.2 million.

“The placing price represents a discount of approximately 2.5 per cent. to the mid-market closing price of 815 pence on 3 February 2021.”