Ashley tipped to take Sport Direct private … again

[Thespence]

BILLIONAIRE MIKE Ashley faces a huge temptation to end Sports Direct's brief career as a public company this week when he is due to detail the scale of a trading relapse at the controversial cut-price retailer.

 

This relapse is likely to lead to the group's third profits warning since its flotation in February, which will pile further pressure on the company, which as well as owning sports stores also owns brands such as LA Gear, Dunlop, Karrimor and Lonsdale.

 

With shares already down by about two-thirds since the flotation, the entrepreneur is fully aware that he has a unique opportunity to buy back the company on the cheap after netting £929 million by selling shares in the public offering.

 

 

At current stock market values, it would cost him just £184m to buy back the publicly owned shares, but even this figure will be reduced if shareholders approve proposals for the company to buy in another 5% of its share capital at a special meeting on Wednesday.

 

"Ashley retained 57% of the company's shares on the flotation but that stake has already risen to 68% as a result of previous share buybacks, and will rise further to 72% once the latest proposal goes through," commented one analyst. "So he would net a useful profit almost irrespective of the price he pays.

 

"A generous offer of 200p a share - more than double the present price - would cost him about £334m, which would leave him with a profit of £595m."

 

The Mansfield-based entrepreneur, who paid £133m to buy Newcastle Football Club, has declined to rule out the possibility of an offer. "I'd never say never," he commented earlier this year.

 

Other entrepreneurs who have bought back their companies in the past after a poor reception in the stock market have included Richard Branson and fellow billionaire Laurence Graff of Graff Diamonds.

 

Neither of these entrepreneurs, however, experienced anything like the scale of criticism levelled at Ashley, whose own housebrokers at Merrill Lynch issued a "sell" notice on the shares last week, saying that the market has become distrustful of the company.

 

And respected analyst Philip Dorgan at Panmure Gordon claimed that a previous statement from the company had been "almost deliberately designed to antagonise its audience".

 

Boardroom rows have also resulted in the departure of a previous chairman and a non-executive director.

 

http://www.sundayherald.com/business/businessnews/display.var.1907715.0.ashley_tipped_to_take_sport_direct_private_again.php

 

[Guest LucasUnger]

[danswan]

And for us this means?

[Rob W]

nowt

 

buthe'll never be able to raise money for another business venture ont eh Stock Exchange - they reckon he's robbed them blind..........

[Dokko]

nowt

 

buthe'll never be able to raise money for another business venture ont eh Stock Exchange - they reckon he's robbed them blind..........

 

Well he has hasn't he? 

 

So he listed, made a mint, bought loads of other companies with their money inside the listed company and out, value falls due to him keeping his cards close to his chest, then he buys the lot back at a massively reduced price!

 

 

[Rob W]

thats called theiving if you or I did it

 

but the City has a very long memory and they really don't like Mr Ashleigh

 

AS far as the club are concerned we'll probably end up paying more on any loan we take out but that's about it

[Dokko]

thats called theiving if you or I did it

 

but the City has a very long memory and they really don't like Mr Ashleigh

 

AS far as the club are concerned we'll probably end up paying more on any loan we take out but that's about it

 

Aye but he's just made £600m if he does go through with it, i doubt he'll need the City again.

[Rob W]

the way these guys stay rich is using Other People's Money - you borrow and then if it all goes pear shaped you still have your stash

 

The Club will continue to borrow - it makes sense from a financial point of view

 

 

[Thespence]

Mike Ashley, the founder of Sports Direct, the retailer, continued his rocky relationship with the City yesterday when he hit out at Merrill Lynch, the company's own broker and one of the banks behind its February flotation, and labelled one of London's top retail analysts a "moron".

 

His comments came as Sports Direct posted a 70pc drop in first half pre-tax profit to £21.2m. Sales fell by 7pc to £668.1m. Net debt over the half grew to £796m compared with just £38m last year.

 

However shares in the retailer, which has lost more than two-thirds of its value since it listed, rose by 14p to 98.25p after it said it would exceed full-year earnings expectations.

 

Mr Ashley likened the current difficult retail environment to a multiple "train wreck", saying that cold weather, England crashing out of European football championships and poor Christmas trading were behind the recent poor performance. However he said the retailer was trading well given the circumstances.

 

"There have been three train wrecks. I have a broken arm, a broken nose and a broken leg but I am going to get on that train and get to the destination," he said.

Speaking to The Daily Telegraph after an extraordinary general meeting to sanction the buyback of shares, Mr Ashley said that Merrill Lynch did not do enough to explain Sports Direct's business model when it floated earlier this year. He said that the retailer had never reported like-for-like sales, something which was not adequately relayed to the City.

 

"On the like-for-likes they [Merrill] are definitely responsible for not communicating it well enough. They say they did tell us about the task ahead of us, but I describe it as somebody saying 'We're going on a hike, get your hiking boots on', and you step out of your front door and actually it is Everest ahead of you," Mr Ashley said. Merrill Lynch declined to comment.

 

Mr Ashley also had a swipe at Philip Dorgan, the retail analyst at Panmure Gordon. Mr Dorgan published a note yesterday morning describing the numbers as "terrible" and saying the results have "all the makings of a financial implosion".

 

However Mr Ashley responded: "Either his clients must be short [on the stock], or he must be a moron." He added: "We've had this business for 25 years. We are totally honest about the train wrecks, and the business still can produce phenomenal underlying performance. We still have stores to roll out across Europe and we have the brands business growing. If that implodes. Well, I can't imagine it."

 

However Mr Dorgan was unrepentant. "Most of the numbers are down. The shares are a third of what they floated at. The stock market doesn't tend to get things wrong," he said.

 

Mr Ashley was in jokey form following the results. Asked who was harder to please, City analysts or supporters of Newcastle United, the football club that he owns, he said: "The Toon Army by a mile."

 

The billionaire has attracted criticism for flouting corporate governance guidelines, lack of communication with analysts, and buying and selling stakes in companies with alarming regularity. However Mr Ashley said this business style had allowed him to build a business with annual sales of £1.3bn, even if it is incompatible with what the City requires.

 

"If you get somebody who is entrepreneurial, your view when you get up on a Monday morning is you are in a risk business. Then you try and combine that with another view that says 'Actually what we want to see is steady, consistent, stable growth'. But my argument is that's not how we got here. We got here by trying to push the envelope a bit," he said.

 

Mr Ashley, who said that he has "no current intention" of taking the company private, said that Sports Direct still had a goal to become the world's most profitable sports group.

 

Shareholders who invested in the company earlier this year should "hold on". "I don't know of another thing to invest in that is anything like [our prospects]," he said. It emerged yesterday that Phoenix Asset Management had taken a 3pc stake in Sports Direct.

 

Sports Direct declared an interim dividend of 2.06p a share, to be paid on April 30, 2008.

 

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/20/cnash120.xml

 

 

 

[Dave]

They slaughtered him on the radio this morning. I know nothing about the stock market but I don't think you get to where he is without knowing what you are doing.

[Guest sicko2ndbest]

This is the reason fleet street conjure all this bullshit up about him. There are a lot of pissed off investors.

 

Big Mike knows what he is doing!

[Thespence]

They slaughtered him on the radio this morning. I know nothing about the stock market but I don't think you get to where he is without knowing what you are doing.

 

Mike knows nowt about the City & stockmarket either, that is the major problem

[ToonTastic]

the way these guys stay rich is using Other People's Money - you borrow and then if it all goes pear shaped you still have your stash

 

The Club will continue to borrow - it makes sense from a financial point of view

 

 

 

You think ? Ashley hates loans and has never taken them out before he's always used his own cash so I'm not sure why that would change ?

[Liam Liam Liam O]

 

Mike knows nowt about the City & stockmarket either, that is the major problem

 

thats called theiving if you or I did it

 

but the City has a very long memory and they really don't like Mr Ashleigh

 

AS far as the club are concerned we'll probably end up paying more on any loan we take out but that's about it

 

Two of the most inaccurate posts ever on this board.

[Thespence]

 

Mike knows nowt about the City & stockmarket either, that is the major problem

 

Two of the most inaccurate posts ever on this board.

 

Everything I have ever read in the financial sections or on financial websites he get slagged. He is a good businessman & tremendous entrepreneur just doest fit well with the City bods.

[Liam Liam Liam O]

 

Mike knows nowt about the City & stockmarket either, that is the major problem

 

Two of the most inaccurate posts ever on this board.

 

Everything I have ever read in the financial sections or on financial websites he get slagge. He is a good businessman & tremendous entrepreneur just doest fit well with the City bods.

 

No one in the city likes anyone though, for someone to make money, invariably someone else has to not make money.  The financial institutions would be falling over themselves to lend Ashley money because he is so good at making it.

 

To suggest he know's nothing about the stockmarket and the City misses the point.  He has become rich because of what he knows about it and how he runs his businesses.

[Thespence]

 

Mike knows nowt about the City & stockmarket either, that is the major problem

 

Two of the most inaccurate posts ever on this board.

 

Everything I have ever read in the financial sections or on financial websites he get slagge. He is a good businessman & tremendous entrepreneur just doest fit well with the City bods.

 

No one in the city likes anyone though, for someone to make money, invariably someone else has to not make money.  The financial institutions would be falling over themselves to lend Ashley money because he is so good at making it.

 

To suggest he know's nothing about the stockmarket and the City misses the point.  He has become rich because of what he knows about it and how he runs his businesses.

 

Some cack in that post. 

 

How am I missing the point of his understanding of the City/stockmarket it is poor, I am sure even you can use google to find this information out. If you can find any credible sources praising Sports Direct as a PLC or Mikes dealings with City apart from the current charm offensive he has adopted since profits are down 70%,  please send me a link. If I am honest I think you have misunderstood the difference between running successful business & dealing with the City/Stockmarket they are two separate things. Have you even read either of the articles in this thread?

 

There is a lad on here who works for financial firm it would be nice to have his input.

 

[Liam Liam Liam O]

 

Mike knows nowt about the City & stockmarket either, that is the major problem

 

Two of the most inaccurate posts ever on this board.

 

Everything I have ever read in the financial sections or on financial websites he get slagge. He is a good businessman & tremendous entrepreneur just doest fit well with the City bods.

 

No one in the city likes anyone though, for someone to make money, invariably someone else has to not make money.  The financial institutions would be falling over themselves to lend Ashley money because he is so good at making it.

 

To suggest he know's nothing about the stockmarket and the City misses the point.  He has become rich because of what he knows about it and how he runs his businesses.

 

Some cack in that post. 

 

How am I missing the point of his understanding of the City/stockmarket it is poor, I am sure even you can use google to find this information out. If you can find any credible sources praising Sports Direct as a PLC or Mikes dealings with City apart from the current charm offensive he has adopted since profits are down 70%,  please send me a link. If I am honest I think you have misunderstood the difference between running successful business & dealing with the City/Stockmarket they are two separate things. Have you even read either of the articles in this thread?

 

There is a lad on here who works for financial firm it would be nice to have his input.

 

 

Me

 

[Thespence]

 

Mike knows nowt about the City & stockmarket either, that is the major problem

 

Two of the most inaccurate posts ever on this board.

 

Everything I have ever read in the financial sections or on financial websites he get slagge. He is a good businessman & tremendous entrepreneur just doest fit well with the City bods.

 

No one in the city likes anyone though, for someone to make money, invariably someone else has to not make money.  The financial institutions would be falling over themselves to lend Ashley money because he is so good at making it.

 

To suggest he know's nothing about the stockmarket and the City misses the point.  He has become rich because of what he knows about it and how he runs his businesses.

 

Some cack in that post. 

 

How am I missing the point of his understanding of the City/stockmarket it is poor, I am sure even you can use google to find this information out. If you can find any credible sources praising Sports Direct as a PLC or Mikes dealings with City apart from the current charm offensive he has adopted since profits are down 70%,  please send me a link. If I am honest I think you have misunderstood the difference between running successful business & dealing with the City/Stockmarket they are two separate things. Have you even read either of the articles in this thread?

 

There is a lad on here who works for financial firm it would be nice to have his input.

 

 

Me

 

 

 

I though it was Scottparkershaircut 

[Liam Liam Liam O]

 

Mike knows nowt about the City & stockmarket either, that is the major problem

 

Two of the most inaccurate posts ever on this board.

 

Everything I have ever read in the financial sections or on financial websites he get slagge. He is a good businessman & tremendous entrepreneur just doest fit well with the City bods.

 

No one in the city likes anyone though, for someone to make money, invariably someone else has to not make money.  The financial institutions would be falling over themselves to lend Ashley money because he is so good at making it.

 

To suggest he know's nothing about the stockmarket and the City misses the point.  He has become rich because of what he knows about it and how he runs his businesses.

 

Some cack in that post. 

 

How am I missing the point of his understanding of the City/stockmarket it is poor, I am sure even you can use google to find this information out. If you can find any credible sources praising Sports Direct as a PLC or Mikes dealings with City apart from the current charm offensive he has adopted since profits are down 70%,  please send me a link. If I am honest I think you have misunderstood the difference between running successful business & dealing with the City/Stockmarket they are two separate things. Have you even read either of the articles in this thread?

 

There is a lad on here who works for financial firm it would be nice to have his input.

 

 

Me

 

 

 

I though it was Scottparkershaircut 

 

  I agree he's probably made some short term mistakes, but there's no way he "knows nowt".  The reality is that he'll be surrounded by people making those sort of decisions for him who have an excellent knowledge of exactly what they are doing, even if he does have the final say.

[Thespence]

The reality is that he'll be surrounded by people making those sort of decisions for him who have an excellent knowledge of exactly what they are doing, even if he does have the final say.

 

You would think so BUT respected city bod David Richardson who was chairman quit & the reasons he gave "unable to establish a strong working relationship with with the executive team"

 

An old article:

 

Nick Bubb at Pali International said: 'There is nobody at the company to comment, the house brokers are adopting a very low profile and Panmure have capitulated and moved it to sell.' Sports Direct does not have a public relations agency or an investor relations team - there was no contact name or phone number at the end of today's statement.

 

Although it said it intended to hire a PR firm soon, several big City firms said they had not been asked to pitch for the business. One senior PR said: 'We'd love to help them. You phone them up and there's no answer.'

 

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=419751&in_page_id=3

 

 

[Minhosa]

You've got to admire his style though.

 

He fucking waltzes in, builds an empire, floats it, gets loads of other people's money yet maintains control and treats it like he always has - as his baby.

 

His problem looks like he can't take having to answer to others.

 

Think of the money he's made. He doesn't have to float any of his other companies or interests so he doesn't really need the markets backing as he can't lose.

 

If it's worth fuck all - he'll take back full control for relative peanuts.

 

If the share price improves he'll be seen as a miracle worker who turned himself and the business around in the eyes of the city and he'll have access to them all to do all over again (in the long term).

 

I think the problem the city has with him (and therefore Sports Direct) is that they didn't really see him coming (or rather his poor communication and don't give a fuck mentality).

 

Everyone bought in on the back of a great balance sheet and a cracking business model. Nobody considered the whims of the bloke controlling the place.

 

It's like arriving at the airport and hiring a driver with a Ferrari to give you a lift home instead of an Octavia.

 

It seems like it's going to be best drive home of all time but the Driver's a complete twat, drives at 175mph, nearly crashes 5 times and mounts the kerb twice - by the time you get home you wished you'd played it safe and stuck to the regular taxi.

 

You hadn't thought about the driver when you bought the use of the Ferrari..........you just looked at the model and expected an awesome experience and to look the bollocks in front of all of your mates.

 

The fact that the bloke driving the Ferrari like a knob has now been able to order another 15 as a result of your order makes you want to hang the fucker...................especially after you got out of the motor at home for all of your mates to see you puke up and shake like a shitting dog.

 

He's beaten them at their own game and they've got the arsehole. Thats what it comes down to for me and I say fair play to him.

 

He's now a Billionaire and he's earned the right not to have to worry about what other people think. But best of all............he can't lose and he knows it.

 

Clever Bastard.

[Dave]

Love the analogy.

[Liam Liam Liam O]

The reality is that he'll be surrounded by people making those sort of decisions for him who have an excellent knowledge of exactly what they are doing, even if he does have the final say.

 

You would think so BUT respected city bod David Richardson who was chairman quit & the reasons he gave "unable to establish a strong working relationship with with the executive team"

 

An old article:

 

Nick Bubb at Pali International said: 'There is nobody at the company to comment, the house brokers are adopting a very low profile and Panmure have capitulated and moved it to sell.' Sports Direct does not have a public relations agency or an investor relations team - there was no contact name or phone number at the end of today's statement.

 

Although it said it intended to hire a PR firm soon, several big City firms said they had not been asked to pitch for the business. One senior PR said: 'We'd love to help them. You phone them up and there's no answer.'

 

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=419751&in_page_id=3

 

 

 

See the bit in bold.  They'd all love a piece of it though!  The media and retail business didn't much like Ashley before he took us over after he sold out the price fixers.

 

That analogy is pretty much spot on, with the addition that they'd all love a drive of his car given half a chance

[Keefaz]

I barely understand any of this, but riches's analogy is one of the best I've read on here for a long time.