As reported in yesterday's DAILY, CO-based Gart Sports
Co. acquired IL-based Sportmart to form the second-largest
sporting goods retailer in the U.S. Terms of the deal were
not released, but Gart, which is controlled by the L.A.
banking firm Leonard Green & Partners, will issue stock to
Sportmart holders "representing" a 27.5% stake in the new
company. The combined company, which will be "about" 60%
controlled by Green, will look to be traded publicly on the
NASDAQ. Yesterday, Sportmart shares on the NASDAQ dropped
$1.1875, or 25%, to $3.5625 (WALL STREET JOURNAL, 9/30).
REAX: In Denver, Penny Parker writes that Sportmart had
seen "a dramatic downward slide" in its stock price from
$10.063 in June '95 to its current state. Paine Webber
analyst Aram Rubinson: "It helps bail Sportmart out of their
own issues, but they're taking a price below the original
market value. It doesn't change the fact that there are too
many stores out there" (DENVER POST, 9/30). For FY '97,
Gart reported a net income of $4.5M. Gart CEO Doug Morton,
who will retain his title in the new company: "We built a
lot of value in Gart. We're not in debt; we're profitable,
that's unique in the industry." Sportmart and Gart stores
will keep their own names and Denver will be the new
corporate headquarters. Sportmart Chair Larry Hochberg, and
his son, Sportmart CEO Andrew, will be elected to Gart's
Board of Directors (Dina Bunn, ROCKY MOUNTAIN NEWS, 9/30).
