Business Briefing: Newcastle feels the Ashley effect

The controversial retail billionaire Mike Ashley has taken full control of Newcastle Utd after raising his stake in the football club on Friday. He is expected to delist the plc from the stock market by 18 July.

Who is he?

It's a good question. An intensely publicity-shy City figure, Mr Ashley, 42, has amassed a fortune as a sports retail entrepreneur, most recently pocketing £929m when Sports Direct, the business he founded, floated on the stock market in February.

According to this year's Sunday Times Rich List, he is the 25th richest person in the country, with an estimated fortune of £1.9bn, even after an extremely costly divorce some years ago. He is thought to live alone in a secluded house in Hertfordshire.

Already the largest shareholder in Newcastle Utd, Mr Ashley now speaks for 93.2 per cent of the shares.

How did he get started?

He left school at 16, opened his first shop in 1982 and quickly built up a chain of sports and ski shops in London. By the late 1990s he had branded the chain Sports Soccer and opened 100 stores nationwide.

A decade later, Sports World International has amassed more than 300 stores, including Lillywhites department store in Piccadilly Circus, which it bought in 2002. Last year it overtook JJB Sports as the UK's largest sport retailer. Mr Ashley also owns the outdoor clothing maker Karrimor, the Dunlop Slazenger and Donnay tennis brands, and the boxing brand Lonsdale.

So, what is he up to at Newcastle Utd?

Mr Ashley now has enough shares to compulsorily purchase those remaining and take full control. He bought an initial 41.6 per cent stake in the club from the family of Sir John Hall, via his company St James Holdings, for £55m in May. He then persuaded the club chairman, Freddy Shepherd, to sell his 28 per cent stake. Finally, on 15 June, Mr Ashley made an offer for the remainder of the club. Having acquired 90 per cent of the outstanding shares from willing investors, he was then able to make a compulsory purchase.

What has happened to the board at the club under Mr Ashley?

A cull last week claimed the scalps of four directors. Chris Mort, the London lawyer leading Mr Ashley's bid, and Steve Hayward, another Ashley associate, have been appointed to the board. Mr Mort became deputy chairman after the boardroom bloodletting that, oddly, spared the chairman, Mr Shepherd. However, Mr Mort will run the club.

Will Newcastle delist from the stock market and if so when?

It's a certainty. The remaining shareholders have no choice but to sell up, and Mr Ashley has vowed to take the club back into private hands by 18 July.

In Newcastle, fans welcomed the announcement. One said: "It is what we have needed, a clean sweep through the boardroom."

Why is Mr Ashley such a controversial figure?

His tactics during the February float of Sports Direct could be described charitably as unconventional, and the company's record so far reads like a manual on how not to handle an initial public offering.

Mr Ashley initially failed to give investors or analysts access to Sports Direct's finance director, sparking fury in the City. The retailer's shares, floated at 300p, have fallen to 1811Ž2p, and it has been left trying to repair its battered image.

He caused further controversy after buying a stake in the sports goods manufacturer Adidas with his own funds and not through his newly floated company, and selling it for £29m profit eight weeks later.

Sports Direct's chairman, David Richardson, who joined from the hotels and leisure group Whitbread, quit after just three months. The firm's public relations advisers had already walked away. Mr Richardson said he had been "unable to establish a strong working relationship with the executive team".

Latest reports suggest that John Gildersleeve, chairman of EMI and Carphone Warehouse, was asked to fill the vacant post but declined. Simon Bentley, former chairman and chief executive of Blacks leisure group, is acting as interim chairman. As an added twist, the board of Blacks faces being ousted by Mr Ashley, who opposes the proposed disposal of the Freespirit surfwear firm. He owns almost 30 per cent of Blacks

What does Mr Ashley have to say about all this?

He has admitted that he "messed up" the float, referring particularly to his failure to have an investor relations team in place prior to listing.

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