The management team fought off bids from British retailer Sports Direct, which is controlled by Newcastle United owner Mike Ashley, and from Irish department store Heatons, in which Mr Ashley has a stake.
It was announced yesterday that the examiner to Elverys Sports, Simon Coyle of Mazars, has approved the management’s bid for the company, in a move that will secure 700 jobs.
Elverys, which is headquartered in Castlebar, Mayo, entered the examinership process in February and was granted protection from its creditors including Nama, which is owed €23m after it acquired loans that AIB made to Elverys.
The company was being sold as part of a wider restructuring of debts owed to Nama by Elverys owners, Mayo brothers John and James Staunton. They had originally bought the brand in 1998, and merged it with Staunton Sports.
It had been hoped in February of this year that Elvery’s would be sold as part of a “pre-pack” receivership process, where the buyer is lined up in advance.
However, a number of rival bidders objected to the prepack sale with Mr Ashley claiming his bid was higher than the prepack bid.
Fears then emerged that 10 of the company’s 67 stores in Ireland could be shut as the group sought rent reductions to return it to profitability.
Although Elverys does not file accounts as it is registered with the companies office as an unlimited company, it has estimated revenues of about €65m.
Previous reports have suggested that if the company’s rent bill was reduced to market level, the company would be profitable.
While the management team have been selected as the preferred bidder, Mr Coyle now has to formulate proposals for a Scheme of Arrangement which must be presented to the creditors for approval, with a view to having those proposals sanctioned by the High Court to ensure the survival of the company as a going concern.