The British group wants to be the sole owner of the Iberian Sports Retail. Sonae's 30% stake will represent a cash inflow of €300 million and an estimated capital gain of around €175 million.
The British JD Group wants to acquire the 50% minus two shares in Iberian Sports Retail (ISRG) held by Sonae and Balaiko, becoming the company’s sole shareholder.
Sonae and Balaiko notified JD Sports Fashion Plc in May of their decision to exercise the put and call option over the shares that JD Group and both companies hold in Iberian Sports Retail Group.
According to information Sonae sent to the Portuguese Securities Market Commission (CMVM) on Friday, the group says it has been notified by JD regarding its decision regarding the Call or Put Option exercised by Sonae together with Balaiko.
“As the Option considered an appreciation of ISRG’s equity of €1 billion, the sale of the 30% minus 1 share held by Sonae in the Company will generate a cash inflow of €300 million and an estimated capital gain of around €175 million. The multiple implicit in this transaction is 9.0x EBITDA attributable for the year ended January 2023”, the note states.
According to Sonae, this transaction will have no impact on Sonae’s consolidated turnover or underlying EBITDA, as ISRG is consolidated using the equity method in the Group accounts.
“In the 12 months ended 31 March 2023, ISRG’s contribution to Sonae’s consolidated EBITDA (by the equity method) amounted to €20 million,” indicates Sonae.
In the information sent to the CMVM, Sonae says that, in accordance with the rules applicable in the UK, the Transaction is only conditional on the approval of an ordinary resolution by the JD Group’s General Meeting of Shareholders, which is expected to take place in September 2023.
Sonae anticipates that the transaction will be completed before the end of 2023.
In an information sent to the CMVM in May, Sonae explained that this put and call option was provided for in the shareholders’ agreement established in 2018 between Sonae, Balaiko and JD Group.
Iberian Sports Retail Group (ISRT) is the leading multi-brand sporting goods retailer on the Iberian Peninsula that operates Sprinter, Sports Zone and JD in Portugal and Spain, the online sporting goods retailer Deporvillage, the fitness equipment brand Bodytone and, more recently, the retail brands Perry and Aktiesport in the Netherlands.
The call option exercise was motivated by a change in the relationship with the JD Group, given the latter’s latest position in sportswear and sportswear retail, which “significantly impacts ISRT’s strategy and growth options”, Sonae explained.