The British sportswear retailer, which has hired Panmure Gordon and Numis to work on the deal, is understood to be finalising arrangements at a heavily discounted offer.
Media reports last night (October 8) suggested that new shares were likely to be priced a 25p, much lower than last night’s closing price of 34.5p.
While the company has confirmed that it is working on a deal, it is yet to reveal further details.
Shares recently plummeted at JJB Sports and Sports Direct following the news that the Serious Fraud Office and was investigating allegations of price fixing and fraud.
The two companies are already the subject of an inquiry by the Competition Commission over a planned transfer of stores.
JJB Sports has reported a substantial increase in first-half losses from £15m to £42m. In August, like-for-like sales fell by nearly 40% as many of its shelves remained empty as a result of suppliers not willing to risk being lumped with unpaid bills from the struggling sportswear firm.