JD Sports to buy USA sportswear retailer Finish Line

Suffolk Capital Management Has Boosted Alibaba Group Holding (BABA) Holding; The Finish Line, Inc. (FINL) Covered By 5 Bullish Analysts Last Week

JD Sports has agreed the "transformational" acquisition of Nasdaq-listed retailer The Finish Line for $558m (£396m) in a deal that would add a 556-store estate across 44 USA states of the largest sportswear market in the world. JD is the leading European retailer of sports, fashion and outdoor brands.

"We are extremely excited to be joining up with Finish Line, a well-established USA operator", said Peter Cowgill, Executive Chairman of JD.

Growing demand for branded sports shoes and clothes has enabled JD Sports to overtake Sports Direct (SPD.L) as Britain's leading sportswear retailer by market value.

The American merger also deals a blow to JD Sports' domestic rival, Sports Direct, which bought a 9.85 percent stake in Finish Line in an effort to make headway in the U.S. market. Headquartered in Indianapolis, Finish Line runs the branded locations in US malls and shops inside Macy's department stores.

Finish Line is also the exclusive retailer of athletic shoes, both in-store and online, for Macy's, operating 375 branded and 188 unbranded concessions within Macy's stores. "We are thrilled to partner with them and look forward to realising the impact we will have on the marketplace together".


Meanwhile, Bill Carmichael, lead director of the Finish Line board, says the board voted unanimously to approve entering into the merger agreement. On completion of the acquisition, the company will focus on bringing JD's highly differentiated multi-channel retail proposition to the United States market. In fact, short interest increased by 25% during the two most recent reporting periods to 10.60 million shares, representing 29% of FINL's total available float.

Finish Line believes that its sale to JD Sports will provide immediate value to shareholders and move it into a stronger position to compete as part of a global enterprise.

JD said by significantly increasing the global scale of the company and therefore its importance to its major worldwide brand partners, the deal is expected to bring greater purchasing power and "strategic alignment" in North America with the major worldwide sportswear brands. This is according to Finish Line's Schaeffer's put/call open interest ratio (SOIR) of 0.09 that ranks in the 5th percentile of its annual range.

Finish Line Inc is getting its financial advice for the deal from PJ SOLOMON and Houlihan Lokey Capital, Inc.

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