Global investment company Invesco (NYSE:
) has proposed a deal that would see it take on British retailer
JJB Sports' outstanding debt.
That debt is currently held by Lloyds Banking Group (NYSE:
) and Invesco, currently with a 47.3 percent stake in JJB Sports,
would then effectively take control. According to
, the plan would then be to work with Dick's Sporting Goods (NYSE:
) on a restructuring plan.
It has been a busy week for Invesco; on Thursday, the company
revealed plans to introduce two new ETFs
. Invesco's PowerShares unit is the fourth largest U.S. ETF
In 2011, JJB Sports made losses of $158 million and coupled with
the sudden departure of CEO Keith Jones, it is obvious that changes
are necessary. Only three months ago, the company received a
partial lifeline when it was boosted with $31.14 million from
Dick's Sporting Goods and another $15.57 million from the Bill and
Melinda Gates Foundation.
For Dick's Sporting Goods, the investment makes complete sense.
A deal with JJB Sports is actually an opportunity for both
companies to spread their business across the Atlantic without
really having to diversify.
There have been no suggestions at the time of writing that the
British company will take on the Dick's Sporting Goods name, but
that is surely a possibility.
A British sporting goods company certainly couldn't sell
ammunition due to gun laws over there. However, that could change
in the U.S. too, as a
petition is being circulated by a Mississippi
asking the company to stop selling high-powered ammunition in light
of the recent Colorado movie theater tragedy.
For now, all of that is academic. We know that Invesco wants to
take control of JJB Sports and we know that it wants to involve
Dick's Sporting Goods in a shake-up. We will have to wait to find
out exactly what that shake-up will involve.
On Monday, Invesco Ltd. traded flat at about $22.60. Dick's
Sporting Goods traded at about $51.50, up roughly 0.5 percent.
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