Sports Direct International Plc, the U.K.’s largest sporting-goods retailer, fell to the lowest in three weeks in London trading after Chairman Mike Ashley sold a stake worth 100 million pounds ($151 million).
The stock dropped as much as 9.2 percent to 391 pence and closed down 5 percent at 4:30 p.m. local time. More than 3 million shares changed hands, 10 times the three-month daily average.
Ashley’s MASH Holdings Ltd. sold 25 million shares at 400 pence each yesterday, equivalent to 4.18 percent of the company, the Mansfield, England-based retailer said today in a statement. Goldman Sachs Group Inc. was the sole bookrunner. The share sale still leaves Ashley as the largest stakeholder with 64.4 percent of the stock. MASH Holdings agreed not to sell any more shares for a year, according to the statement.
The 48-year-old billionaire, a former squash coach, founded the company in 1982 by opening an eponymous store Mike Ashley Sports. The executive, who also owns English Premier League soccer club Newcastle United, has led an expansion of the U.K. retailer to about 400 stores.
Sports Direct reported last week that third-quarter sales climbed 21 percent to 589.5 million pounds, more than the median analyst estimate of 12 percent growth.
By selling shares at 400 pence, Ashley gave up a potential 16 percent return in the next 12 months, according to analyst predictions compiled by Bloomberg. The average target price from seven analysts is 465 pence, with Mayan Uthayakumar at Goldman Sachs predicting the stock will rise to 580 pence, or 45 percent above Ashley’s sale price.
Today’s share price decline pared this year’s gain to 5.8 percent and left a market value of about 2.5 billion pounds.