JD Sports walks away from rival

By Simon Duke for MailOnline
Updated: 06:41 EDT, 12 March 2011

The fate of JJB Sports now lies in the hands of its landlords after one of its biggest rivals pulled its proposed takeover of the loss-making football kit and trainers emporium.

JD Sports: Has withdrawn its offer for JJB Sports

JD Sports, which made its approach earlier this year, has withdrawn its tentative offer for JJB after being denied access to its books.

The move sent JJB shares tumbling 2p, or 13%, to 13.5p amid growing concerns that the firm will have to call in the administrators, leaving shareholders high and dry.

In a tersely worded statement, JJB dismissed its rival's approach as 'highly conditional and lacking sufficient detail to be deliverable'.

Chairman Mike McTighe put a brave face on the group's predicament, insisting that he 'remained confident' that a deal could be struck to achieve a 'successful turnaround' of JJB.

The group's prospects now hinge on McTighe's rescue package, which will be have to approved by 75% of its landlords in a vote on March 22.

JJB, which loses an estimated £1m a week, recently warned that it would go bust unless it was able to slash its rent bill and shut dozens of its worst performing stores.

Its emergency plan will see the group axe 43 loss-making stores, mainly in the north of England and Scotland, within a year, with a further 46 stores earmarked for closure by 2013.

This will leave JJB, which recently raised £31.5m from investors, with a 'core' of around 150 shops.

JJB is also asking its landlords to halve their rent bills and agree to receive payment on a monthly rather than quarterly basis.

But many landlords are sceptical as the so-called Company Voluntary Arrangement marks the second time that JJB has asked its property owners for a helping hand in as many years.

Bankruptcy would put around 6,500 jobs at risk and leave JD Sports and Mike Ashley's Sports Direct with a firmer grip on Britain' spor tswear retai l market.