LONDON (Alliance News) - Home shopping and education supplies business Findel PLC on Friday said it is holding talks with sports clothing and equipment retailer Sports Direct International PLC about a possible supply agreement which would see Sports Direct founder Mike Ashley become Findel's chairman.
In a filing published on Friday afternoon, following the earlier disclosure of the talks between the two, Findel disclosed Sports Direct's holding in the company had increased to just shy of 30%, up from 17% previously.
Findel said it is in the early stages of talks with Sports Direct on a possible commercial supply agreement between its Express Gifts business and Sports Direct.
Under the proposal, Ashley, the executive deputy chairman of Sports Direct, would replace outgoing David Sugden as Findel chairman.
Findel said the proposal was made by fund manager Schroders PLC, which owns a 20% stake in Findel, and has been supported by Toscafund Asset Management LLP, which owns 9.9% of Findel.
Findel said it believes there to be "great merit" in exploring a commercial supply deal with Sports Direct and said "Mike Ashley could make a valuable contribution to the board of Findel", but has yet to decide whether Ashley should become chairman.
Later Friday, Sports Direct confirmed the early-stage talks and the potential appointment of Ashley to the Findel board.
It said that, like Findel, "Sports Direct considers there to be great merit in exploring these arrangements" but noted it was acting on its own behalf and independently from Schroders and Toscafund, though it did welcome their support for the proposals.
Findel and Sports Direct both said there is no certainty an agreement will be reached.
Findel shares were up 13% to 198.00 pence on Friday afternoon, the best performer in the FTSE All-Share. Sports Direct shares were down 2.6% to 311.20p.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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