The path looks clear for Nike's takeover

Shares in Umbro rose 18.5 pence, or 11.3%, to 181.25 pence on the news.

Sports Direct increased its stake in Umbro to 29.9% in October, raising doubts that Nike would be able to win enough support for its takeover.

Earlier, Umbro said poor sales of England football jerseys would cut into its revenues, following England's failure to qualify for Euro 2008.

"Umbro has contractual arrangements in place with its key customers," it said.

"However, it is now highly unlikely that by the year end these key customers will have taken ownership of a significant number of England replica jerseys that are currently in Umbro's distribution facilities," it added.

"This will have a material impact on revenues for the year."

Nike deal

Sports Direct said on Friday that it had sold two thirds of its stake in Umbro to Nike, or 29 million shares at 193.06 pence each.

It also backed Nike's takeover, which values Umbro shares at 193.06 pence per share.

Both Sports Direct and JJB are major customers of Umbro, which also supplies the kit for six English Premier League clubs and football clubs abroad, including Portugal's Benfica and Israel's Hapoel Tel Aviv.

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The Umbro board has said that it unanimously backs a Nike takeover, under which its relationship with the English Football Association would be protected.

Umbro chief executive Steve Makin called the Nike offer an "excellent deal" for shareholders.

A successful bid would help Nike, the world's largest maker of athletic footwear, to boost its presence in the lucrative football market and compete better with German rival Adidas ahead of the 2010 football World Cup.

But in order for it to succeed, US-based Nike requires 75% of Umbro shareholders to approve the transaction.

Umbro had sought to reassure retailers that they should not be concerned by the change in ownership.

Sports Direct is controlled by UK billionaire businessman Mike Ashley, who bought Newcastle United football club earlier this year.