Dick's (DKS) Makes GBP 20M Investment in JJB Sports
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Dick's Sporting Goods, Inc. (NYSE: DKS) has agreed to make a 20 million pounds Sterling strategic investment in JJB Sports plc, a leading U.K. sports retailer.
Under the terms of the agreement, Dick's Sporting Goods will purchase 18.75 million pounds in junior secured convertible notes and 1.25 million pounds in ordinary shares of JJB Sports, subject to the approval of JJB's shareholders. In addition, Dick's has been granted the option to purchase an additional 20 million pounds in junior secured convertible notes of JJB in connection with a follow-on financing expected to take place in the first fiscal quarter of 2013. Subject to certain conditions, the notes are convertible into ordinary shares of JJB Sports at Dick's election. Upon full conversion of the notes, Dick's would become a controlling shareholder of JJB. Certain current shareholders of JJB are also expected to participate in the 2012 and 2013 financings through the subscription for 10 million pounds and 5 million pounds, respectively, of additional ordinary shares of JJB.
In conjunction with its investment in JJB Sports, Dick's will be entitled to nominate up to two non-executive directors to serve on the Board of JJB. Dick's will also be entitled to Board observer rights under certain circumstances.
Under the terms of the agreement, Dick's Sporting Goods will purchase 18.75 million pounds in junior secured convertible notes and 1.25 million pounds in ordinary shares of JJB Sports, subject to the approval of JJB's shareholders. In addition, Dick's has been granted the option to purchase an additional 20 million pounds in junior secured convertible notes of JJB in connection with a follow-on financing expected to take place in the first fiscal quarter of 2013. Subject to certain conditions, the notes are convertible into ordinary shares of JJB Sports at Dick's election. Upon full conversion of the notes, Dick's would become a controlling shareholder of JJB. Certain current shareholders of JJB are also expected to participate in the 2012 and 2013 financings through the subscription for 10 million pounds and 5 million pounds, respectively, of additional ordinary shares of JJB.
In conjunction with its investment in JJB Sports, Dick's will be entitled to nominate up to two non-executive directors to serve on the Board of JJB. Dick's will also be entitled to Board observer rights under certain circumstances.
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