By and  on October 31, 2007

U.K. ACTIVEWEAR RETAILER SPORTS Direct International plc could block Nike Inc.'s $582 million all-cash bid for Umbro plc.

Mike Ashley, owner of the discount sports retailer, bought 21.7 million shares of Umbro Tuesday at Nike's $4 asking price. He now owns 29.9 percent of the stock, enough to stymie a takeover because the deal requires 75 percent shareholder approval.

At the time of last week's bid, Sports Direct and JJB Sports plc, the two largest sporting goods retailers in the U.K., already owned 15 and 10 percent of Umbro, respectively. Some analysts doubted whether the sports retailers would make an aggressive move against U.S. active giant Nike. "While there is the potential for a counterbid by Sports Direct, our European analysts view this as unlikely as it could damage the retailers' business with Nike, a major vendor for Sports Direct," a Citigroup report said last week.

Sports Direct could not be reached for comment.

Nike said in a statement, "We've made a compelling offer that has the unanimous support of Umbro's board and the support of the Football Association."

An exclusive brand for Dick's Sporting Goods in the U.S. and Sports Direct in the U.K., Umbro sells apparel, footwear and equipment in more than 90 countries, and has soccer marketing relationships, including with the U.K. national team. Umbro did about 149.5 million pounds, or $276 million at current exchange, in sales last year, and with licensed sales added, the number goes up to 409.4 million pounds, or $755 million.

On the London Stock Exchange, Umbro's stock closed Tuesday at 193.50 pence, just above Nike's asking price of 193.06 pence, or about $4 — up from a previous close of 190 pence.

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