Mike Ashley’s Sports Direct has cancelled its bid to buy Goals Soccer Centres - and blamed the firm’s board for failing to work with it during negotiations.
In September Sports Direct had put forward an offer to buy the full stake in Goals for 5p per share. The deal was valued at £3.8m.
Sports Direct already owns an 18.9% stake in Goals but the company has said that it has now cancelled its offer to buy the rest of the firm as it has not been able to carry out the correct level of due diligence. It said this was because Goals’ board members refused to engage with Sports Direct.
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In a statement to the stock exchange Sports Direct said: “Further to the announcement made by Sports Direct on 23 September 2018, Sports Direct confirms that it does not intend to make an offer for Goals Soccer Centres plc and is consequently bound by the restrictions under Rule 2.8 of the Code, save in the circumstances set out below.
“Sports Direct had only limited and fitful access and cooperation from the board of Goals to support Sports Direct’s possible offer. Accordingly Sports Direct was unable to complete the necessary due diligence to progress the offer.
"At the same time the board of Goals continues to pursue the AMA (accelerated mergers and acquisitions) process it set out on 29 August 2019, a process which, if successful, Sports Direct believes will result in significant dilution in value for those shareholders who do not participate in the AMA process and be to the detriment of certain creditors.”
Sports Direct tabled its offer to acquire Goals amid an ongoing scandal at the five-a-side football pitch company, which is thought to owe over £12m to HMRC due to issues going back 10 years.
The issues led to Goals admitting that a number of its senior management had in the past engaged in ‘improper behaviour’ that had caused it to pay the incorrect level of VAT. The problems led to the company being forced to de-list from the London Stock Exchange.
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Mike Ashley been expanding his business portfolio over the last few years, with his most notable deal being Sports Direct’s acquisition of House of Fraser out of administration.
But the billionaire has often clashed with board members when he has not got his way. In the weeks before Debenhams entered administration Mr Ashley demanded that the department store chain sack the majority of its board and appoint him as chief executive. He was ultimately ignored.