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Newcastle United owner Mike Ashley is ready to make a £220million swoop for sportwear firm Umbro.

 

Ashley paid £133m for control of United in the summer, and his Sports Direct business is said to be behind a bid for the England shirt manufacturers.

 

Sports Direct already sell more than 60 per cent of England shirts, with sales likely to fall if England fail to qualify for Euro 2008.

 

Umbro, sponsors of Alan Shearer, said: "In response to recent speculation, the board of Umbro confirms that it has received an approach which may or may not lead to an offer being made."

 

One City analyst said: "Sports Direct has 15 per cent of the share capital of Umbro so it is likely to be them."

 

Newcastle's current shirt manufacturer is adidas and Ashley is unlikely to retain that deal if he buys Umbro. Sports Direct refused to comment on the takeover speculation.

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Nike are supposedly bidding to become manufacturers of the England kit according to FiveLive. The timing seems a bit strange like.

Nike tried to get a deal with the German national and offered really big money (IIRC six times as much as Adidas). Jormany would have accepted but had to opt for Adidas due to some legal concerns.

 

Would make sense for Nike to try it elsewhere now. Business reports in Germany also say that Nike are in fact interested to buy Umbro while the Sports Direct offer is regarded as just a rumour.

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Don't Germany stick with adidas due to tradition much like England with Umbro?

 

The question of tradition was a big issue here. The current contract with Adidas is running out in 2011. Nike offered 500m Euro for eight years + a further 100m for the youths and women teams. That was much more than Adidas offered. If the gap had not been that big there would have been no doubt about the FA sticking with Adidas. They did in the end because it was not clear if Adidas got a valid option to extend the contract for a further three years when the current contract is running out (which was just a verbal promise to settle differences about players being allowed to wear boots from other companies at the last WC). To avoid a long legal battle the FA opted to stick with Adidas who are now paying 20m a year + bonuses. A compromise that has heavily criticised as it is still much less then Nike would have paid.

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why's he spending 220 mill on umbro but only giving allardyce 11 mill net in the summer? Where's Ronaldinho, Kaka' and Ibrahimovic?!!!!

 

Sack the board

 

Perhaps Umbro are doing a special promotion, buy 1,000,000 shirts and get a free Ronaldinho.

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I thought Nike tried to get the England contract at last renewal only to lose out again to Umbro. And then I thought they'd extended their deal to something ridiculous like 7 or 8 years?

 

As for us not likely to to be sticking with Adidas if Ashley takes over Umbro, I can't understand that idea. Adidas pay a fucking shitload of money to be the company which whos label appears on our shirts. So why the hell would Ashley wave goodbye to that cash in favour of awarding the contract to a company he owns?

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I thought Nike tried to get the England contract at last renewal only to lose out again to Umbro. And then I thought they'd extended their deal to something ridiculous like 7 or 8 years?

 

As for us not likely to to be sticking with Adidas if Ashley takes over Umbro, I can't understand that idea. Adidas pay a fucking shitload of money to be the company which whos label appears on our shirts. So why the hell would Ashley wave goodbye to that cash in favour of awarding the contract to a company he owns?

 

Errr...presumably because it would be a lucrative contract for that company? :lol:

 

The real financial issue I spose is whether he'd award it to Umbro at an undervalue as obviously that'd be in conflict with the Toons interests..though I'm sure he could justify it to himself by arguing he'd therefore make more money available to the Toon in other ways. All speculation though and the truth is we'd never know for sure which deal was better.

 

The only issue for me is the fact that Umbro make shit shirts. Adidas are hit and miss.....last shirt good, this one awful...one before that good, one before that ok....one before that good, one before that horrific...one before that good. I'd like to see Nike have a go tbh.

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Nike to buy Umbro in £285m deal

 

 

Umbro, the maker of the England football team's kit, has agreed to be bought by US sportswear giant Nike in a deal worth £285m ($580m).

 

Nike said the deal would allow it to "significantly expand" its presence in "a key growth category" for the firm.

 

As well as providing kit for the England team, Umbro also supplies the kit for six Premier League clubs.

 

The Football Association said Nike had assured it that the FA's relationship with Umbro would be protected.

 

Manchester-based Umbro said last month that sales of England tops had been "disappointing", and analysts are concerned that sales could suffer if England fail to qualify for next year's European Championship.

 

Defensive moves

 

Speculation had been rising that Nike was set to launch a bid after Umbro said last week that it had received an approach about a possible offer.

 

 

ENGLISH PREMIER LEAGUE CLUBS WITH UMBRO KIT

Birmingham

Blackburn

Everton

Sunderland

West Ham

Wigan

 

See Umbro's share price

 

On Friday, retailer JJB Sports bought a 10.1% stake in Umbro in a move to protect its stake in the market for England football shirts.

 

The owner of rival retailer Sports World, Sports Direct International, already owns a 15% stake in Umbro.

 

In addition to the England team, Umbro also provides kit for the Republic of Ireland, Northern Ireland, Norway, and Sweden.

 

In the Scottish Premier League, Umbro supplies kit to Rangers and Hearts.

 

'Excellent deal'

 

Under the terms of the offer, Umbro shareholders will receive 193.06p for each share. In Tuesday afternoon trade Umbro's shares were up 25.5p, or 15.5%, at 190.5p.

 

 

There is an ongoing battle between Nike and Adidas to sign up the very top teams

Nigel Currie, Brand Rapport

 

The chief executive of Umbro, Steve Makin, said the offer was an "excellent deal" for shareholders.

 

"We will be a stronger and better business as part of Nike and this deal will allow us to accelerate our existing growth strategy by leveraging Nike's global resources and expertise," he added.

 

Brian Barwick, the chief executive of the FA, said: "We are delighted that the proposed acquisition will allow us to continue our strong historical relationship with Umbro while benefiting from the marketing expertise and financial strength of Nike."

 

"Nike has provided firm assurances that the FA relationship with Umbro will be protected and enhanced, and we look forward to working closely with both companies moving forward," Mr Barwick added.

 

'World class brand'

 

Nike began moving into football in the early 1990s and has been steadily expanding its share of the market, catching up with German rival Adidas.

 

"There is an ongoing battle between Nike and Adidas to sign up the very top teams," said Nigel Currie, director at sports brand experts Brand Rapport.

 

"From a marketability point of view, the Nike brand is very appealing to top clubs and international federations," he added.

 

In its offer document, Nike said Umbro was "a world-class, authentic football brand, with well established positions in key growth markets and a deep football heritage".

 

"As such, Umbro is highly complementary to Nike's existing football business and it is intended that it will operate as an independent, UK headquartered Nike affiliate," the US firm said.

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Sports Direct builds Umbro stake

 

Sports Direct International has almost doubled its 15% stake in Umbro, throwing into doubt Nike's plans to buy the maker of the England football kit.

The share swoop took the UK sportswear firm's Umbro stake to 29.9% and sent Umbro's shares up as much as 4.61% to an all-time high of 198.75p.

 

The move allows Sports Direct to block Nike from taking control of Umbro in a £285m deal announced last week.

 

Umbro's shares closed at 193.5p, above Nike's 193.06p-a-share offer.

 

The share purchases by Sports Direct, which owns London-based Lillywhites and the Sports World chain, follows rival retailer JJB Sports move to buy a 10.1% stake in Manchester-based Umbro earlier in the month.

 

Both Sports Direct and JJB are major customers of Umbro, which also supplies the kit for six English Premier League clubs and football clubs abroad, including Portugal's Benfica and Israel's Hapoel Tel Aviv.

 

Shares in Sports Direct declined 4.58% to 135.5p at the close of trade in London.

 

The Umbro board said last week that it had unanimously backed a Nike takeover of the firm, under which its relationship with the FA would be protected.

 

Umbro chief executive Steve Makin called the offer an "excellent deal" for shareholders.

 

A successful bid would help Nike, the world's largest maker of athletic footwear, to boost its presence in the lucrative football market and compete better with German rival Adidas ahead of the 2010 football World Cup.

 

But in order for it to succeed, US-based Nike requires 75% of Umbro shareholders to approve the transaction.

 

Umbro has tried to reassure retailers that they should not be concerned by the change in ownership, but the recent share buying suggests that they are not appeased and want to protect their stake in the market for England football shirts.

 

Sports Direct is controlled by UK billionaire businessman Mike Ashley, who bought Newcastle United earlier this year.

 

Source: http://news.bbc.co.uk/1/hi/business/7070051.stm

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