Sports Direct (LON:SPD) has made a bid to acquire the half it doesn't own of irish clothing chain Heatons.
The Mike-Ashley led company is to buy the stake in the clothing and homeware store for €47.5mln through a call and put option.
Heatons has 44 stores in the Republic of Ireland and 10 in Northern Ireland, with half already including a Sports Direct branded section.
Broker Liberum said: “While it is not explicitly stated, the deal looks earnings enhancing immediately.”
In the year to April, Heatons reported sales of €219mln and pre-tax profits of €10mln.
Peel Hunt said the deal “looks like a perfectly sensible deal,” adding, “but this is not the game changer that Sports Direct has been promising us.”
It said it expects a major deal by the end of the year, with management seemingly in active mode following today’s deal and the stake it took in Findel last week.
But the broker warned that there is a lack of momentum in the core business with a “lack of high store standards and exclusive third party product within the stores” hitting the company.
Shares lost 2.5%, or 19p, to 756p today.
It is not the first time the company has used call and put options.
The retailer took an £85mln put option on Debenhams shares in January, upping its stake to 17.1%, while last September, it took a £43mln put Tesco.