The agreement is for 25y and there is provision for Frasers to increase shares up to 26%. On the announcement briefing Agostinelli said ther $60M raised will pay for some of the new stores, and that subsequent stores will be financed by profits from the first new stores. There are royalties paid back to Frasers in addition to the dividends on the shares and a share in what we and they hope is a larger business.
What if there are differences in priorities or irreconcilable clashes in personalities? What if the Sports Direct stores do not perform? Surely then there is need for a capital raise to fund the continued investment in new store rollout. Or do they pause, reflect and adapt?
My feeling is that these types of relationships are easier to start than to finish.
Differing opinions but from what I seeof the success of Mike Ashley, and his son in Law Michael Murray, they are very straight shooters, with genuine intent and track record of succewssful strategic investments.
AX1 Price at posting:
$1.87 Sentiment: None Disclosure: Held
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