Deals and IPOs

Nike to Buy Umbro for $580 Million


Nike, the world's largest maker of athletic shoes and clothing, has agreed to buy Umbro
in a deal that values the British sportswear firm at 285 million pounds ($580 million).

Nike said on Tuesday shareholders would received 193.06 pence per share in Umbro, the sponsor of the England soccer team, representing a premium of approximately 61 percent to the closing share price of 120 pence on Oct. 17.

Shares in Umbro, which warned last month that its 2008 profits would miss forecasts after England replica shirts sold poorly in 2007, closed at 165 pence on Monday.

Seymour Pierce analyst Andrew Wade said last week he did not believe the fundamentals supported a bid at 150 pence per share, while another analyst, who declined to be named, said 160p would be a fair price.

Umbro has been working on a strategy that focuses more on soccer clothing rather than on England replica shirts. It hoped that by expanding its international business, its financial performance would be less bumpy when moving from a year with a big soccer tournament to a non-tournament year.

British sports retailer JJB Sports said on Friday it had taken a 10.12 percent stake in Umbro to safeguard its interest in the market for replica shirts.

Nike said Umbro shareholders would also received the interim dividend of 1.94 pence per share.

Umbro was advised by JPMorgan Cazenove, Merrill Lynch is acting as financial adviser and broker to Nike.

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