The rapper Master P and former NBA All-Star Baron Davis have jointly entered into negotiations with parent company Adidas to acquire the once-mighty shoe brand Reebok, which is reportedly on sale for some $2.4billion.
Master P is the stage name of Percy Robert Miller, a 53-year-old rapper, actor, record producer, and entrepreneur whose net worth is said to be valued at $200million.
Davis, 41, is a retired former professional basketball player who played 15 seasons for various teams, including Charlotte, New Orleans, Golden State, the Los Angeles Clippers, Cleveland, and New York.
He currently works as a studio analyst for Turner Network Television’s coverage of the NBA.
The rapper Master P (left) and former NBA All-Star Baron Davis (right) have jointly entered into negotiations with parent company Adidas to acquire the once-mighty shoe brand Reebok, which is reportedly on sale for some $2.4billion
Reebok, the once-popular shoe brand, has had difficult competing with the likes of Nike and New Balance. The image above shows the Reebok logo at a store in New York City
‘These companies have been benefiting off us, this could be history for this company going black-owned,’ Master P told ESPN reporter Eric Woodyard
In his post-playing days, Davis has branched out to acting in films and television shows. He has also started up his own business selling clothing.
Their interest in buying Reebok was reported by Forbes and ESPN.
‘These companies have been benefiting off us, this could be history for this company going black-owned,’ Master P told ESPN reporter Eric Woodyard.
The mogul said that he and Davis are ‘prepared financially’ after two months of talks with Adidas.
‘Imagine if Michael Jordan owned Reebok? That’s what I’m talking about making history,’ he said.
‘As we focus on turning Reebok into a lifestyle brand not just a basketball brand, our most important initiative will be to put money back into the community that built this company.’
‘I think Reebok is being undervalued,’ Davis told Forbes.
‘I left Nike as a 22 year old kid representing myself and made the jump to Reebok, which took a chance on me as a creative and as an athlete.
‘I want the people I know athletes, influencers, designers, celebs to sit at the table with me.’
Adidas, the German sportswear maker, said earlier this month that it was considering a potential sale of Reebok 15 years after it bought the Boston-based company for $3.8billion. The Adidas store is seen above in the SoHo section of New York City on December 14
Adidas, the German sportswear maker, said earlier this month that it was considering a potential sale of Reebok 15 years after it bought the US-focused brand to take on archrival Nike on its home turf.
The decision will be announced on March 10, when the company officially presents its new strategy, Adidas said.
The company bought Boston-based Reebok for $3.8billion in 2005, but a lack of progress in turning it around led to repeated calls from investors to dispose of the brand.
It might be an attractive target for a private equity firm or another smaller sports retailer that will use it, like Adidas did, to break into the US marketplace, said Michael Faherty, a portfolio manager at Adidas and Nike investor Seilern Investment Management.
Adidas said the strategic alternatives it is considering include both a potential sale of Reebok as well as the brand remaining a part of the company.
‘There is still a material chance that nothing will come out of it,’ Colin Wong, a portfolio manager at Nike shareholder Mawer Investment Management, said.
Wong said some potential options for Adidas include spinning Reebok off as a stand-alone public company, or selling the brand to private equity, another major sports retailer or a multibrand player like VF Corp.
Reebok’s net sales fell 7 per cent in the third quarter of 2020 to $489.40million, after falling as much as 44 per cent in the preceding quarter.
In 2019, Adidas wrote down Reebok’s book value by nearly half, compared with 2018, to $1.03billion.
Recent collaborations with celebrities like Cardi B and a refreshed focus on women’s apparel have put the brand in a better place, said Jessica Ramirez, retail analyst at Jane Hali & Associates.
‘Reebok won’t be much of a burden for whoever takes it on if there is a sale,’ Ramirez added.
Adidas said earlier in November that it was expecting a drop in overall sales for the last three months of the year as the reimposition of lockdowns in Europe would likely offset a return to growth in China and strong demand for running gear and products designed by singer Beyonce.