Nike's wholly owned subsidiary, Nike Vapor Ltd., bought 19.9 percent of Umbro stock from Sports Direct International at 193.06 pence, or $3.83 a share — the same as the all-cash price Nike offered on Oct. 23 to buy the soccer label. Additionally, Sports Direct International has promised to vote its remaining 10 percent stake in Umbro in favor of the buyout at the Jan. 31 meeting where the takeover will be voted.
This comes after Mike Ashley, owner of Sports Direct International, the U.K. discount sports retailer, had almost doubled his holdings from 15 percent of Umbro's stock to 29.9 percent — enough to block Nike's acquisition because the deal requires 75 percent shareholder approval — immediately after Nike made its $582 million all-cash bid.
Analysts had speculated that a move against Nike's bid could damage Sports Direct's business with Nike, a major vendor for the retailer.
Sports Direct and Umbro could not be reached for comment.
"We are pleased to have acquired this strategic stake in Umbro, which gives us a strong platform from which to proceed with our acquisition of this iconic football brand," Mark Parker, president and chief executive officer of Nike, said in a statement. "We remain fully committed to our compelling offer for Umbro, which continues to have the support of both Umbro's board of directors and the Football Association."
After this transaction, Nike is Umbro's biggest shareholder with 19.9 percent, followed by Jupiter Asset Management with 18.4 percent, then U.K. sports retailer JJB Sports with 10.1 percent and Sports Direct with 10 percent.
Umbro did about 149.5 million pounds, or $276 million, in sales last year, and with licensed sales added, the number goes up to 409.4 million pounds, or $755 million. An exclusive brand for Dick's Sporting Goods in the U.S. and Sports Direct in the U.K., Umbro's apparel, footwear and equipment retail in more than 90 countries, and the brand has soccer marketing relationships, including with the U.K. national team.