Thu, 04 Feb 2021 | BUSINESS NEWS
JD Sports plans to raise around £464 million through a placing of ordinary shares as the retailer seeks to capitalise on acquisition opportunities. Based on the company’s current market capitalisation of £7.95 billion, JD Sports said the placing would raise “around 6 per cent” of existing issued share capital.
The placing will involve close to 58.4 million new ordinary shares, with an issue price of 795p per share. The fundraising comes after the company upgraded its pre-tax profit forecast for the year to January 30 to £439 million, compared to £100 million in 2015. JD Sports said that strong overseas performance had been a “major factor in the significant growth” of its pre-tax profit.
The expected proceeds of the raising will sit alongside the company’s net cash, which was reported as £1 billion in December 2020 (prior to its recent £364 million acquisition of US sportswear retailer DTLR Villa), and a £700 million revolving credit facility.
With this substantial acquisition war chest, the company said it believes “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 fundraising will be conducted via an accelerated bookbuild, with Investec Bank and Peel Hunt acting as co-ordinators and joint bookrunners. Applications have been lodged with the FCA for the placing to be admitted to the London Stock Exchange’s premium listing segment, with admission expected on February 8.
JD Sports has continued to perform strongly during the COVID-19 pandemic and looked set to acquire Debenhams late last year, before withdrawing its interest in the wake of Arcadia Group’s collapse. In June, the company put its subsidiary Go Outdoors into administration, before re-acquiring it the same week in a pre-pack acquisition.
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