British billionaire Ashley again becomes major owner of Finnish Amer Sports

Novator also increase holding in sports equipment firm

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Buy cheap, sell at huge profit!
      The British billionaire Mike Ashley, who has created his fortune by buying and selling sports stores and recognised sports and leisure brands, has exercised this principle of business moneymaking highly successfully. The latest example involves his company's stake in the Finnish firm Amer Sports Corporation.
      The newest development in the colourful ownership drama was experienced on Wednesday when Reuters reported that Sports Direct - the sports retailer controlled by Mike Ashley - had acquired a nearly five per cent stake in Amer Sports and had thus again become one of the major owners of the Finnish sports equipment firm.
      Ashley’s Amer portfolio was empty for just two months. In November Sports Direct sold all of its 12.16 per cent stake in Amer to the Finnish private investment company Ajanta for EUR 19.04 per share.
      Prior to that point, Ajanta had already acquired a stake almost the same size via forward market transactions, announcing in November that its ownership in Amer was 22.2 per cent.
     
The plummeting of Amer’s stock price apparently startled Ajanta, bringing the company to its senses. According to some market rumours, the company was about to make substantial losses after having bought a large number of shares for EUR 19 per share, while two weeks ago the share price slumped to around EUR 13.
      According to Ilkka Seppälä, the Managing Director of Ajanta Oy, the financing and collateral of the Ajanta operation were secure all the time.
      However, it was reported on Tuesday that Ajanta had sold half of its stake in Amer to the investment company Novator, owned by the Icelandic investor Thor Björgólfsson, and the two companies had formed "a strategic partnership". Reportedly, the joint shareholding of Novator and Ajanta in Amer Sports Corporation amounted to 25.17 per cent. Novator is of course the same company that has been involved in a long-running effort to bring changes to the structure of the Finnish telecoms operator Elisa.
      According to the information receved on Wednesday, the joint ownership of Novator and Ajanta in Amer Sports was just 20.31 per cent.
     
Apparently, five percentage points of the joint shareholding of the partnership had vanished in the course of one day. The sum is exactly the same as bought by Sports Direct the same day.
      It is being assumed that Ashley bought back part of the shares he had sold to Ajanta. The selling price was EUR 19.04 per share, but when buying them back he only paid EUR 13.50 per share. On paper, his profit was EUR 48 million.
      In order to make things even less straightforward, Novator also announced on Wednesday that it had increased its stake to 20.3 per cent, as the share price is now so low.
      Before this announcement the largest shareholder of Amer Sports Corporation had long been the British investment company Silchester, with a stake of 15 per cent.
      When the forward market contracts expire next spring, Novator will have 20.3 per cent and Ajanta six per cent. The Norwegian consumer goods giant Orkla has a stake of 5.4 per cent, while Templeton Funds have five per cent and Sports Direct has 4.96 per cent as mentioned.
     
Mike Ashley's other business interests include the ownership of Newcastle United football club, recently in the news for the dismissal of its manager Sam Allardyce and his replacement by Kevin Keegan.
      The earlier involvement of Ashley's Sports Direct in Amer Sports was examined in an article from November last year, linked below.
      Amer Sports numbers among its major brands Wilson, Salomon, and Atomic skis. The company's winter sports interests have been hit of late by the adverse weather conditions last winter, which caused retailers to cut back on their purchasing this season.


Previously in HS International Edition:
  Profit warning slices 16% from Amer Sports stock value (11.1.2008)
  Mysterious British billionaire acquires 10% stake in Amer Sports (6.11.2007)

Links:
  Amer Sports
  Ajanta
  Sports Direct
  Amer Sports: Notification of change in shareholding under the Finnish Securities Market Act
  Mike Ashley (Wikipedia)

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