Mike Ashley, the founder and deputy chairman of Sports Direct International, has raised £100m by selling part of his stake in the retailer. It is his first sale since the company was floated in 2007.
Ashley, who also owns Newcastle United football club, disposed of 25m shares at 400p each, cutting his shareholding from 68.6% to just over 64%. In a statement to the stock exchange, Ashley said he would not sell any more of his shares for at least a year.
Last week the company which also owns Lillywhites and the Slazenger and Dunlop brands reported a 23% rise in profits during its Christmas quarter and said it was certain of hitting its full-year target. Now Britain's biggest sporting goods retailer, it has benefited from the demise of rival JJB last year. The positive update pushed its shares to a 12-month high of 452p on Friday, but the news of Ashley's share sale sent them down 5% yesterday to 409p.
Sources close to the company would not speculate on the reasons for the sale. Newcastle supporters must be hoping some of the money is destined for new players in the summer after losing their star striker Demba Ba to Chelsea in the January transfer window. Ashley was recently said to be interested in department store group House of Fraser, but the disposal could also be related to tax planning ahead of the end of the financial year.
Oriel Securities, joint broker to the company, said the sale was a "highly positive development as it increases liquidity in the stock, which has been a hindrance in the past". But independent analyst Nick Bubb said: "Opinion is divided on whether this will help improve liquidity in the stock or spells another collapse in the share price."
Last year shareholders rejected a proposal to give Ashley a one-off share bonus which could have netted him around £26m.