(Adds Nike and analyst comments, details, updates shares)
By Jonathan Cable
LONDON Oct 23 (Reuters) - Nike Plc (NKE.N), the world's largest maker of athletic shoes and clothing, has agreed to buy England soccer-kit maker Umbro UMB.L in a deal that values the British sportswear firm at 285 million pounds ($580 million).
"We felt the combination of Nike with Umbro gives us a clear leadership in football globally and would be one of those merger opportunities made in heaven," Eunan McLaughlin, Nike's vice president of EMEA, told Reuters on Tuesday.
Umbro supplies the national soccer teams of Ireland, Sweden and Norway, six FA Premier League teams and more than 100 other professional teams globally as well as England, and McLaughlin said Nike intended to continue growing the brand.
"We want to invest in and grow the Umbro brand. We are in this for the long haul. There is no intention of changing the England football team, it will remain an Umbro-branded business. But of course we want the opportunity to transfer some assets within the two brands," McLaughlin said. Nike said shareholders would receive 193.06 pence per share in Umbro, a premium of approximately 61 percent to the closing share price of 120 pence on Oct. 17.
"We have put a very compelling offer on the table, we have been through it with the board of Umbro and they are recommending it to their shareholders," McLaughlin said. Shares in Umbro, which warned last month that its 2008 profits would miss forecasts after England replica shirts sold poorly in 2007, were up 14.4 percent at 188.75 pence 0750 GMT.
"The price of 193p looks a good price for the business -- it would certainly not be worth this in the absence of any bid," Seymour Pierce analyst Andrew Wade said
Umbro has been working on a strategy that focuses more on soccer clothing than on England replica shirts. It hoped that by expanding its international business, its financial performance would be less bumpy when moving from a year with a big soccer tournament to a non-tournament year.
British sports retailer JJB Sports Plc JJB.L said on Friday it had taken a 10.12 percent stake in Umbro to safeguard its interest in the market for replica shirts.
Sports Direct (SPD.L), the sports retailer founded by reclusive tycoon Mike Ashley, has a 15 percent stake in Umbro and was initially tipped as the potential buyer.
"With Sports Direct and JJB owning over 25 percent of the business and concerns about the future of the England kit deal, this is not necessarily over. However, at this level, we would accept the offer," Wade said.
Nike said Umbro shareholders would also receive the interim dividend of 1.94 pence per share.
Umbro was advised by JPMorgan Cazenove, Merrill Lynch is acting as financial adviser and broker to Nike.