JD Sports Fashion PLC (LSE:JD.) has published a response to media reports on a meeting between its boss and his counterpart at Footasylum, whose takeover was being investigated by the competition watchdog.
In a video obtained by the Sunday Times, the FTSE 100 group’s executive chairman Peter Cowgill is shown meeting Barry Bown in a car park near Bury in Greater Manchester on 5 July.
READ: JD Sports ordered to sell Footasylum by UK competition watchdog
The video was secretly filmed by an unnamed competitor of JD Sports who opposed the deal.
They were sitting in a car at Bridge Hall industrial park, which the paper noted is “roughly equidistant” between the two companies’ head offices, and initially they were joined by JD’s general counsel, Siobhan Mawdsley.
It is understood that the Competition and Markets Authority (CMA) has launched an investigation into this meeting, since it happened while it was examining JD’s £90mln takeover of Footasylum.
According to City rules, the two sides were allowed to hold business meetings but “no business secrets, know-how, commercially sensitive information, intellectual property or any other information of a confidential or proprietary nature” can be shared while a verdict is awaited.
They were not allowed to integrate Footasylum into JD or avoid competition between the two.
“Peter Cowgill has known Barry Bown on a business and personal basis for over 25 years. As a result, it is not unusual, or in any way suspicious or illegitimate, for them to meet from time to time,” JD said on Monday.
“The Sunday Times omitted to report on the positive obligation that JD has under the terms of the Interim Enforcement Order to take all reasonable steps to encourage key staff of the Footasylum business (which includes Barry Bown) to remain with the business.”
The retailer said that the CMA has already been fully apprised of the content of the meeting on 5 July and the reasons of it, adding that it “firmly believes” that it does not represent wrongdoing or a breach of rules.
“It is disappointing that the Sunday Times has not reported in a more balanced way on the highly irregular and potentially illegal covert surveillance undertaken by a third party for their own interests. JD hopes that a regulator, tasked with acting in the wider public interest, is able to more critically regard the actions of the third party for what they are,” it commented.
It also noted that its stakeholders are aware that the board “treat governance matters extremely seriously and with the utmost transparency” and that it has already committed to split the executive chairman role into chairman and CEO before the next AGM.
Last week, the CMA ordered the sale of Footasylum as the merger meant customers would have “fewer options and could face higher prices, fewer discounts, and less choice of products in store”.
Also on Monday, regulatory filings showed that US investing giant BlackRock (NYSE:BLK) had built a 4% stake into the sneakers seller.