JD Sports' Planned Footasylum Takeover In Question

Can JD Sports merge with Footasylum without interference from Sports Direct?

Kola Gbadamasi

November 1st, 2019

JD sports is on the rise and it has some people worried. 

Mike Ashley, the Sports Direct chief has complained to the Competition and Mergers Commission that the £90 million merger between JD Sports and Footasylum will give them an unfair advantage over the market share.

Sports Direct has seen an 84% growth in its stock price after forming a low at £1.66 on July 29th and appears to be continuing its ascent as it is currently trading at £3.11. Price did peak at a high of £9.24 in April 2014 and may have some way to go before it reaches those heights again.

On the other hand, JD Sports has seen a 123% growth this year climbing from £3.40 to trade at its current price of £7.67. The higher price of JD Sports shares and the increased growth demonstrates that the market values the worth of their share more than they do with Sports Direct shares, which may be the reason for Mike Ashley expressing concerns over the merger.

JD Sports Weekly Chart
JD Sports Weekly Chart

The growth for JD Sports since 2015 has seen an astonishing growth of 735%. With an advance like this in just over 4 years, there is no telling how high price will rise.

What is for sure is that JD Sports investors are reaping the rewards of putting their trust and funds into this increasingly popular high street store.

If the merger does go ahead then the investors may continue to see further profits being added for the foreseeable future.

Keep it simple, keep it Sublime!