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A NEW AUTHORITY IN SPORTS RETAIL: WOOLWORTH BUYS TSA
Published May 8, 1998
FL-based The Sports Authority (TSA) will be bought by Woolworth Corp. for $761M in stock and assumed debt in a move "that could revive the 202-store chain's prospects for growth," according to Tom Stieghorst of the Fort Lauderdale SUN-SENTINEL. As part of the stock swap, Woolworth will pay 0.8 of its shares for each TSA share, and at Woolworth's closing price of $23 yesterday, the 0.8 share is valued at $18.40, just above TSA's closing yesterday of $18. Woolworth valued the stock swap at $582M and will assume $179M in debt. TSA's management team will be retained and its headquarters will stay in South FL. Marty Hanaka will become CEO of TSA, meaning a "reduced role" for TSA Founder & Chair Jack Smith. Stieghorst adds that Woolworth "is unlikely" to alter TSA's plan to open 31 stores this year (SUN-SENTINEL, 5/8). MORE CONSOLIDATION: Despite the recent weakness in sales of sporting shoes and apparel, Woolworth Chair Roger Farah said, "we believe the right time to put the business together is during the tough times" (WALL STREET JOURNAL, 5/8). In N.Y., Kenneth Li reports that the deal "is a big boost" to Woolworth's athletic retail operations. Woolworth currently operates 7,200 Foot Locker, Lady Foot Locker, Champs Sports and other athletic shops worldwide (N.Y. DAILY NEWS, 5/8).