John Wardle and David Makin, the tycoons in the sports shop industry and founders
of the famous JD Sportswear retail chain, have sold off a huge stake in the group and netted a cool 21.6m pounds. Each of them will take home 10.8m pounds from this sale of a quantity greater than 6.5m shares at a healthy price of 330p. This represents a 14 per cent stake sale. It is to worth noting that the shares of this sportswear retailer had dipped to as low as 44.5p in 1999, and has staged a remarkable comeback to make a five year top at 366.5p.
Despite this sale, the founders will continue to retain a 56% controlling interest in the sportswear retail chain that they conceived and brought to fruition in 1981. They had not sold any portion of their stake in the company since the company was formed in 1996. The proceeds will be used for their personal use by investing it in family trusts.
It is also believed that John Wardle, who is also the deputy chairman of Manchester City, would not be investing his share of the proceeds in his club and would prefer to keep this windfall gain locked up in family trusts.
Their move comes on the back of a strong sales performance from the chain as it revealed a 35pc increase in profits. The full year profit now stands at 16.5m pounds.
The founders claimed that this sale was done on the advice of their broker so that institutional demand for their shares could be met. It was felt that low liquidity of their shares was becoming a problem and people wanting to buy them had very little floating stock in the market to make their purchase. This infusion of shares into the market would address this problem to some extent.