Hibbett, Inc. (NASDAQ:HIBB) shares are trading higher by 18% in the premarket session on Tuesday.
Hibbett announced a definitive agreement in which JD Sports Fashion PLC (OTC:JDSPY) will acquire Hibbett for $87.50 per share in cash, representing an aggregate enterprise value of approximately $1.1 billion.
Per share price represents a 21% premium to the April 22, 2024, closing price.
Last month, JD Sports anticipated a boost in the lackluster market from the Euro soccer championships, the Paris Olympics, and new styles of trainers and tracksuits featuring brands like Nike, Inc. (NYSE:NKE), Adidas AG (OTC:ADDYY), and HOKA, Reuters reported.
Under the terms of the definitive merger agreement, Hibbett has agreed to suspend the payment of dividends on its common stock and the purchase of shares under its existing Stock Repurchase Program through the transaction's closing.
"Today's announcement is a true testament to all that our Hibbett | City Gear teams have built over the years and reinforces the strength of our brands, our close relationships with our vendor partners, and our team of dedicated colleagues across the country," said Mike Longo, President and Chief Executive Officer of Hibbett.
The deal also represents a 29% premium to the 120-trading day volume weighted average price of Hibbett.
"We're thrilled to acquire Hibbett | City Gear, combining two of the most respected athletic retail brands in the United States, as we continue to strategically expand our global multi-brand platform," said Régis Schultz, Chief Executive Officer of JD Sports.
Following the closing of the transaction, Mike Longo will continue to serve as President and Chief Executive Officer and Jared Briskin will take on the role of Chief Operating Officer of Hibbett.
The transaction is expected to close in the second half of 2024.
Hibbett will maintain its corporate headquarters in Birmingham, Alabama.
Price Action: HIBB shares are trading higher by 18.6% to $86.00 premarket on the last check Tuesday.
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