(Reuters) - Sporting goods retailer Dick’s Sporting Goods Inc (DKS.N) said it has agreed to make a 20 million pound ($31.75 million)investment in British sportswear retailer JJB Sports Plc JJB.L.
Dick’s will purchase 18.75 million pounds ($29.76 million) in junior secured convertible notes and 1.25 million pounds ($1.98 million) in ordinary shares of JJB Sports, subject to approval of the Wigan, UK-based company’s shareholders.
Pittsburgh-based Dick’s has also received an option to buy 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 quarter of 2013.
Upon full conversion of the notes, Dick‘s, the largest publicly traded U.S. sporting goods retailer, would become a controlling shareholder of JJB.
Dick’s will be entitled to nominate up to two non-executive directors to serve on the board of JJB, the company said in a statement.
Earlier this week, JJB said it was in talks with its bank and an unnamed “potential strategic partner” to raise financing.
Reporting by Chris Jonathan Peters in Bangalore; editing by Carol Bishopric