When Mike Ashley was asked what he would do with the cash raised from floating Sports Direct International in February, he said he hadn’t a clue. Now it turns out he wants to buy Newcastle United.
Mr Ashley got the better of the City when he sold a chunk of SDI – owner of the Sports World chain – to institutional investors for nearly £1bn just before the markets took a bath. Now he is giving something back. His offer for the Magpies is pitched at 100p a share, valuing the football club at £133m - a 19 per cent premium to yesterday’s closing share price and a 50 per cent premium to the average close over the last month.
Having spent £183m on a stake in Adidas in March, Mr Ashley still has plenty of cash to spend. Investors who are sitting on losses from buying SDI shares in the float – they are still below their issue price – had better hope he springs some more cash bids on the stock market before long.