Sports Direct in Fight to Snap Up Us Boxing Brand

The Sports Direct discount retail chain is battling for control of the US Everlast boxing brand made famous by Muhammad Ali. The controversial UK business, which has infuriated investors by refusing to communicate since it joined the stock market in February, said it had agreed a $30-a-share bid for Everlast, valuing the business at $135m (£67m). Including debt the deal is worth $168m.

Last night the British group's bid was topped by New York investment firm Hidary offering $31.25-a-share. Hidary had previously tabled a $26.50 offer.

A Sports Direct spokesman last night refused to comment on the bid battle, but the offer is Sports Direct's second corporate move in three weeks as founder Mike Ashley pursues his ambition to turn the company into the world's biggest sportswear retailer. The group spent £39m buying a 5% stake in Amer in Helsinki, which controls ski brands Salomon and Atomic, together with Wilson tennis and golf equipment and the Suunto diving and sailing brand.

Sports Direct controls a wide portfolio of sports brands including 400 Sports World Stores and brands such as Slazenger, Donnay, Dunlop and Lonsdale.

In a statement to the stock exchange the group said: "This acquisition is in line with Sports Direct's strategy of acquiring further brands whose heritage and core values are consistent with Sports Direct's existing group brands portfolio." The deal would allow Sports Direct to "launch other group brands into the US market".

Everlast traces its roots back to 1910, when it was established in the Bronx, New York, as a swimwear manufacturer. The company moved into boxing in 1917 when boxer Jack Dempsey asked the company to produce some protective headgear for training. Two years later he became world heavyweight champion.

Recently it has diversified, moving into footwear, underwear, fitness equipment for children and heart rate monitors. The company, which reported sales of $40m and earnings of $9m in 2006, joined the Nasdaq main market this year.

Sports Direct, advised by Credit Suisse, said it intended to finance the purchase from a credit facility. Its shares fell 2p to 181.5p. They had lost ground this week on concerns that the wet weather will hit sales. They are now down 40% from their float price of 300p at the end of February.

Jonathan Pritchard, Oriel Securities analyst, said investors would be worried about the potential acquisition: "It has hardly been wall-to-wall joy so far owning Sports Direct but the one thing that investors really feared has happened: the company is starting to venture to the States." He described the price of the boxing specialist as "pretty punchy" and said it was a "clear statement of intent" that Sports Direct was targeting the US where so many UK retailers had run into trouble.

Mr Pritchard said it "remained impossible" to be confident about Sports Direct. "I keep thinking there'll come a time to shut your eyes and buy this, and they keep giving the market a reason to keep selling."

Winning brands

Sports Direct controls some 400 Sports World sportswear outlets, mostly in the UK. The group also owns the Lilywhites store in London's Piccadilly and the 50-outlet Original Shoe Company. Other brands under its control include: Dunlop, Donnay, Lonsdale, Kangol, and Karrimor. The group also controls 29% of Blacks Leisure, which owns the Blacks, Millets, Freespirit and O'Neill stores

Earlier this month the company bought a 5% stake in Helsinki-based Amer for £39m. Amer controls the Salomon and Atomic ski and snowboard brands, together with Wilson tennis and golf equipment, Precor fitness equipment and the Suunto diving and sailing brand. Privately Sports Direct's founder Mike Ashley has just bought Newcastle United FC.