With the new directors in place, looks like JJB might recover?

Second day of bouncing back and finishing at best of the day.

The MACD is negative and below its signal line but is now turning up and looking for a bullish divergence to come soon. Well oversold

JJB Sports will be forced to seek fresh funding after admitting yesterday that it was on course to breach the rules attached to its bank loan after trading worsened. The struggling sportswear retailer, which has been in distress since a disastrous trading update two years ago, said yesterday that it was talking to Bank of Scotland, the Lloyds Banking Group subsidiary, after it became clear it would break its banking covenants when they are next tested in January, the Times reports.

It certainly is a stock where an appetite for risk is required.

t/o talk around 15p minimum to 40p max - gla!!!

lol & kerchinnnnnnnnnnnnnngggggggggggggggg soon!! today just a taster so far!!
Looking through the prospectus, Crystal Amber have been granted a waiver on rule 9 of the takeover code following a 30% shareholding. Harris associates on the other hand have not applied for such permission. As such there could be an offer coming from Harris following the placing if they exceed 30%.... which they probably will if they exercise the warrants from 21st Feb onwards. Exciting stuff.... keep it rolling.

prospectus is vast. I trust that everyone has read it now but these are some of the main points. The offer becomes ex rights tonight and then you can apply for 0.483 shares for every one held. The company is to move over to AIM from the main market in April. Trading has been disappointing but the revamped stores continue to perform well. A revised business plan needs to be prepared for BoS by 24th February. Then a further fundraising will be required sometime in April.

t/o chatter from the twilight zone:-


'The most interesting situation presented in RNS is the situation of share holding after refinancing as that effectively means handing over the company to 5ii (if others do not take up their share allocations): The 5iis are:

Harris Associates

Crystal Amber

IAML

B & M Gates

GP cap

After refinancing, their share holdings would be (in percentage)

Present holdings: 44.3

After refinancing: 58

After refinancing (exclusively): 71.9

After exercising warrants: 76.4

After exercising warrants (exclusively): 86.3

I do not think that these 5iis (actually 5iis IAML = 4iis), who have already invested around 100 million on JJB (that is 44.3 percent of company for their share buying before last refinancing, their buying shares in previous refinancing, and later) would be willing to let JD sports take over the company cheaply (below their own cost), especially when these 5iis are expecting that JJB could turn around and would start making profit, and thus are willing to put more money in to see that.

That means, at least 100 million for 44.3 percent of company or over 220 million for whole company, means around 35 pence per share (NAV of JJB is of that order too). Thus I believe (IMO), if any figure JJB management must be talking about with prospective takeovers would be in order of around 35 pence per share or door.

In such situation, I do not know if takeover would happen from outside. Though I can see takeover from inside (that is by 5iis), if not immediately than in near future.'

guardian summary:

'JJB Sports raising 31m as takeover talks continueThe takeover talks could lead to the creation of a 750-shop sports and leisurewear powerhouse, and end speculation over JJB's future

JJB Sports is raising funds as takeover talks with rival JD continue.

JJB Sports is pushing on with an 31.5m fundraising as its shares surged this morning on the prospect of a merger with rival JD Sports.Both retailers admitted last night that they were in "initial discussions" after JD approached JJB last month, but stressed the "highly preliminary nature of these discussions". The takeover talks could lead to the creation of a 750-shop sports and leisurewear powerhouse, and end speculation over JJB's future.

JJB shares jumped over 30% to 6p in early trading while JD shares dropped 12.5p, or 1.5%, to 835p. Analysts believe a deal could be hammered out, although buying JJB is seen as "risky".

"With JJB's activist investors already underwater and having agreed to a further 31.5m equity injection, any deal is likely to hinge on whether JD Sports can justify a price that would satisfy the lead JJB investors," said John Stevenson, retail analyst at Peel Hunt.

Lossmaking JJB this morning set out the details of the emergency fundraising, first announced on Christmas Eve, after a slump in sales forced it to warn that results would miss forecasts and that it might breach the terms of a 25m loan.

The troubled retailer is raising 31.5m (30m after costs) by issuing 630m new shares at 5p each. Its two largest shareholders, Harris Associates and Crystal Amber the activist investor headed by Richard Bernstein have pledged their support, alongside Invesco Perpetual, the Bill & Melinda Gates Foundation and GoldenPeaks Capital.

Harris and Crystal Amber will be able to nominate a non-executive director to the board following the fundraising. Shareholders will vote on 18 February. JJB also announced today that it wants to transfer its shares from the London Stock Exchange's main market to Aim by the end of April.

JJB had also indicated that it would need a second injection of cash. However, a takeover by JD Sports, in which Mike Ashley's Sports Direct owns a 12% stake, would make any extra cash call unnecessary.

JJB has been fighting for survival since 2008, when chief executive Chris Ronnie was ousted after it emerged that his stake in the business had been seized by the administrators to the Icelandic bank Kaupthing.

The two companies have had contrasting fortunes. Last month, fashion-led JD Sports said Christmas sales were up by 2.5% and that it would beat profits forecasts for the current financial year. JJB's Christmas sales were down 16%.

Analysts believe that JD can afford to buy JJB, which has a market value of around 30m while JD is worth over 400m. JD is forecast to have had 70m in cash at the end of January. There is little overlap in store formats specialist, noted Freddie George at Seymour Pierce.

"Suppliers, in particular Nike and Adidas, are likely to be supportive of any deal," he added.

Mark Photiades at Singer said: "This deal is clearly not without its risks given JJB's current position." JJB has net debt of 25m and the funding shortfall could be of a similar magnitude. JD would need additional cash set aside to launch a refit programme in stores and would also have to fund short-term losses.

"These, together with rationalisation and exceptional costs, perhaps of the order 10-20m, could mean that the entire exercise could cost between 50-100m prior to any equity value, albeit trading losses and integration costs could be funded from ongoing cashflow. JD's current cash surplus looks capable of funding the upfront deal costs," Photiades said.

JD is focused on sports fashion while JJB wants to be known as a sportswear

http://menmedia.co.uk/manchestereveningnews/news/business/s/1407065_jd_bosses_can_turn_around_jjbs_fortunes

February 02, 2011

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Retail experts say JD Sports Fashion has the power to turn around the fortunes of embattled JJB Sports as the north west firms talk over a possible takeover deal.

JD was among a number of potential buyers which approached Wigan-based JJB about a possible sale in December, but the talks came to nothing.

Discussions with JD restarted in January and yesterday JJB said it believed Bury-based JD was 'contemplating a bona fide offer'.

Bury-based JD's chairman Peter Cowgill said the talks were in their infancy, but added: We have got a very good management team and we have got ideas about what we could do with JJB.

We would run them independently.

Analyst Mark Photiades, of Singer Capital Markets, said: We suspect that JD will have been weighing up such a deal for some time and that, given JJB's well-documented issues, believes now is the right time.

JD's top team of Peter Cowgill and chief operations officer Barry Bown have proven strength in operational management and if anyone stands a good chance of turning round JJB's fortunes, they do.

JD's current cash surplus looks capable of funding the upfront deal costs.

David Stoddart, an analyst at FinnCap, called the potential acquisition 'a game changer'.

He said: If the deal goes through then you don't need two head offices any more, which means you can eliminate most of the 20m that JJB spends there.

You can probably fold the distribution operation into one too, which could potentially save another 20m.

But JJB is losing 50m a year, which outweighs all of the benefits unless you can restructure it. A lot of costs have got to come out at branch level.

Clearly a chunk of the stores overlap or are badly located.

The only other party who could achieve synergies like that would be Sports Direct, and who knows with Mike Ashley? One week ago, Andy Carroll wasn't for sale!

There is potential for Sports Direct to face competition concerns if it were to buy JJB, as it already has an 11.9 per cent stake in JD.

Sarah Peters, a senior analyst at retail experts Verdict, said a JD takeover deal would pose a 'big threat' to Sports Direct, which has benefited from JJB's recent struggles.

She said: "JD has proven to have a very successful business model and, while it is more fashion-focused than JJB, has the knowledge and expertise of the sports market to help the business succeed.

"Any purchase by JD would undoubtedly be a massive task for it, particularly given JJB's struggles over recent years.

"However, in the long term, both businesses would benefit through extra efficiencies and gains in scale. It would also provide JD with the opportunity to further expand its own label business."

Strategy expert Professor Gary Davies, of Manchester Business School, said: It makes sense for them to come together.

There is nothing inherently wrong with two competing brands in the same family if they can tidy up the market segmentation.

Wigan-based JJB, which has 6,300 staff and 250 stores, has proposed a 31.5m share offer to see it through in the short-term while it finalises long-term restructuring and refinancing plans.

It is also planning a move from London's main stock market to junior market AIM.

JJB's share surged 17.4 per cent yesterday, rising 0.8p to 5.35p, while JD's slipped 0.41 per cent or 3.5p to 846p.

intersting - jd same price as jjb will be;

3 February 2011



JD Sports Fashion Plc ("JD Sports Fashion" or the "Company")



Rule 2.10 announcement - relevant securities in issue





In accordance with Rule 2.10 of the City Code on Takeovers and Mergers, JD Sports Fashion confirms that, as at the close of business on 2 February 2011, the Company had 48,661,658 ordinary shares of 5 pence each in issue on the main market of the London Stock Exchange, under the UK International Securities Identification Number ('ISIN code') GB0004771548.



For further information please contact:

Investec Investment Banking Tel: +44 (20) 7597 5970

David Currie

Martin Smith



MHP Communications Tel: +44 (0)203 128 8100

lol expect a bid war here dudes aside from the 5 iis, jds, & sd have heard that other 'interested parties' want to t/o jjb before the very lucarative olympics now looming and jjb internet offering...............................

ignore the crap going round imo

kerrrrrrrrrrrrchinnnnnnnnnnnnnnnnnnngggggggggggggggggggggggggggggggggggarooooooooooooooooooooooooooooooooooooooooooooooooooooooooo

good stuff...
http://www.independent.co.uk/i/matrix/the-business-matrix-monday-7-february-2011-2206290.html



JJB Sports, the troubled sports equipment chain, plans to close a significant number of stores in a bid to safeguard its future. Bank of Scotland has set JJBs board a deadline of 24 February to present a restructuring plan to curtail its losses. Last week, JJB unveiled a 31.5m fundraising, as it said it had been approached by rival JD Sports Fashion over a potential takeover bid for the 250-store retailer. JD Sports has performed strongly in recent years.

Can't quite see how owning JJB shares can be classified as 'good'

JJB is really a poor bet as JD Sports will certainly not take over a loser share.

hyleo - tend to disagree - as long as the cva goes ahead and i believe it will despite landlord rumours etc then jjb will be in the kind of state jd want it and for jd to keep it away from their main competitor sd- but nail biting times for jjb imminent - at first glance the news looks bad, jd are intersted but can not say much right now, the 5 ii investors propping jjb up at 5p new shares, other interested parties etc of course there is also the other matter of tribunals for some former employees! one director already paid off! what a pigs ear this is - but i am sticking with this - i am just thankful i got in low - it may well drop more.... more news:

JD Sports backs off as JJB seeks to reach creditors' agreement

By Laura Chesters


Sunday, 13 February 2011

JD Sports is not pursuing its takeover talks for rival JJB Sports while it awaits the outcome of the latter's proposed rescue plan.


Wigan-based JJB issued details on Friday of its last-ditch rescue attempt with the closure of 45 stores through a company voluntary arrangement (CVA). The closures could be followed by another 50 over two years.

A CVA allows troubled retailers to close or change the rental terms on unprofitable stores.

JJB, which employs more than 6,000 people, and its adviser, KPMG, have begun negotiations with landlords to get approval for the plan.

Although it's the retailer's second CVA in two years many landlords are thought to be minded to support JJB thanks to its good communication with them over the past year and its obvious dire circumstances. Another possible plus is its chief executive, Keith Jones, who is well respected among the landlords.

Landlords have been critical of retailers that they believe have "unnecessarily" asked for CVAs, some of which have failed due to lack of landlord support, including footwear chain Stylo in 2009.

JJB needs to win the support of 75 per cent of its unsecured creditors and 50 per cent of its shareholders for the CVA to avoid administration. Some experts suggest a pre-packaged administration could be on the cards if the CVA fails, and that is when JD Sports is likely to circle the carcass.

The CVA details, including slashing JJB's rent and moving to monthly rather than quarterly payments, as well as the closures, will be sent to creditors and shareholders at the end of the month. It has said just 150 stores of its 245-shop estate are "core to its future".

JJB has confirmed plans to raise 31.5m with the support of its two biggest shareholders, Harris Associates and Crystal Amber, and of the Bill & Melinda Gates Foundation. This fundraising will be followed by another, necessary to keep the company alive past April.

Elsewhere in retail, Tom Knight, the former JJB boss, is in the running to take the reins from Neil Gillis at outdoor clothing firm Blacks Leisure this week, while DIY chain Focus is close to selling five leases to a supermarket either Asda or Tesco as it raises money to fund a new store design.

from the other side:....

'I am still in as in my opinion JJB share price is gift at the moment. I have around 200,000 shares. My only worry is management, as it seems they are incompetent. Just imagine, over 6000 employees for 250 shops, they are too many,

Company has turnover of over 400 million, making gross profit of over 160 million, and still posting operating losses because of overheads, is unacceptable. In my opinion, a company that is making gross profit of around 160 million from 250 outlet (Plus on-line sale) a year should post operating profit rather than loss. I think for JJB to survive, they have to work in reducing the overhead to no more than 20 percent of turnover, ideally 15 percent.



One could find this anomaly easily by Looking at JJB half-yearly report in their RNS published on 28 Sept 2010: Here are the figures:

Revenue = 184 million (in 6 months from Feb to July)

Gross Profit = 77.6 million (6 months from Feb to July, excludes Christmas time sale]

Expenses = 102.2 million [for 6 months, consisting of local expenses = 89.5 million, Central cost = 10.6 million, Exceptional Items = 2.1 million]

Operating loss = 24.6 million (102.2 million 77.6 million ... that is for 6 months)

I think their expenses (102.2 million for 6 months ... or ... around 205 million for a year) are too much and they should think to reduce that rather than anything else so that their gross profit should cover that expenses and still leave something to show as operating profit.'

fantastic news from the telegraph tonight - feeling real good about me recent buys & top ups here, could be a mega kerrrchinnnggggggggg pretty soon (for me anyhow! & anyone else who has bought recently! he who dares .... lol) and not too late for more --- cricial key support received - this would have been a deal breaker had the landlords not been agreeable - yeeeeeeeeeeeeeeeeehaaaaaaaaaaaaaaaaaaaaaaaaa!!

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8334822/JJB-Sports-gains-support-for-CVA-proposal.html

JJB Sports gains support for CVA proposal
Leading property companies are warming towards JJB's proposals to close loss-making shops through a company voluntary arrangement (CVA), despite an initial backlash.

JJB Sports gains support for CVA proposal Photo: AFPBy Graham Ruddick 7:50PM GMT 18 Feb 2011
Comment
The sports retailer has held a series of meetings with its landlords ahead of the full publication of its plans in the next two weeks, and is understood to have received favourable feedback.

According to industry sources, landlords which include Land Securities, British Land and Hammerson are frustrated at the proposals but consider the CVA the best of a bad choice.

JJB claims it could collapse into administration if the CVA is rejected, and landlords fear such proceedings would lead to their retail units being tied up for a long period as the company is unwound.

However, approval of the CVA could provoke fury among rival retailers, many of whom have threatened to try to renegotiate rents.

It is the second time in two years JJB has used a CVA to seek to withdraw from leases on loss-making shops. The company is proposing to close 45 "significantly underperforming" stores over the next year, as well as putting a further 50 units "under review". At least 75pc of unsecured creditors must support the CVA for it to go ahead.


easy dough imo dudes - remember ray not too long ago...

in fact should see some northerly moves next week - more news before end of february!!

'Full details of the CVA proposal, which needs the backing of the holders of more than 50 per cent of shares and 75 per cent of creditors, will be published in late February.'


First phase of JJB rescue plan approved by shareholders

February 18, 2011

JJB Sports secured its short term future as a business today after shareholders voted to approve plans for a 31.5m share offer.

Despite ongoing takeover talks with JD Sports Fashion, JJB held the emergency fund-raising after struggling sales forced it to warn investors it would not be able to make repayments on a 25m loan.

A company statement read: "The board is pleased to announce that each of the resolutions proposed at the general teeting held today to approve the proposed firm placing and placing and ien ofer of, in aggregate, 630,000,000 nw odinary sares and other related matters was duly passed without amendment by the required majority on a vote conducted by way of a poll."

The company, which currently operates 250 stores, is now able to finalise its long-term restructuring and refinancing plans.

They include a company voluntary arrangement which will allow it to terminate leases and shut 45 under-performing stores and negotiate reduced rents on other branches.

Full details of the CVA proposal, which needs the backing of the holders of more than 50 per cent of shares and 75 per cent of creditors, will be published in late February.

i would not wanna be outta jjb right now!! only after i've made me dough here - lol!