A pedestrian walks past the entrance of a Sports Direct store in London. Daniel Leal-Olivas / AFP
LONDON: Britain's Findel on Monday rejected a takeover approach from the country's largest sport goods retailer Sports Direct, saying the bid significantly undervalued the online retail and education Business.
British retail tycoon Mike Ashley's Sports Direct, the sportswear firm that is currently Findel's largest shareholder, said earlier it would offer to buy the remaining shares it does not already hold in Findel for 161 pence per share, a one-pence discount to Findel's close on Friday.
The offer values Findel at about 139.2 million pounds ($184.15 million). Findel has a market capitalisation of about 140.6 million pounds, according to Refinitiv data.
"The board believes that the mandatory offer significantly undervalues the group and its future prospects and is unanimous in its rejection of the offer of 161 pence per share and recommends that shareholders should take no action at this time," Findel said in a statement.
Findel added it will write to shareholders with its formal response to the offer once the offer document has been posted.
Sports Direct has had recent success with selling some of its clothing brands on Studio.co.uk, the online retailing arm of by Findel's largest Business Express Gifts. The division, which has evolved from a catalogue Business to an online retailer, now sells fashion, home and leisure items, toys and gifts.
Sports Direct was required to make the mandatory cash offer after it bought 6 million more of Findel shares on Monday, bringing its total stake to 36.8 percent from 29.9 percent earlier.
Findel shares, which rose as much as 12.7 percent in the day, closed up 8 percent at 175 pence - well above the 161 pence per share that Sport Direct plans to offer. Findel shares have fallen 18.2 percent in the year so far.
Sports Direct, which has been an investor in Findel since September 2015, said the offer would help the companies expand on their existing commercial agreements.
Sports Direct expects the offer to be financed from existing cash resources and said it has no intention to make any changes to Findel's employees and management, if the deal goes through.