Shares in shoe retailer Footasylum soared on Monday after JD Sports said it had bought a significant stake in the smaller rival.

The British shoe brand said in a stock market announcement that it had snapped up an 8.3 per cent holding in Footasylum for “investment purposes”, causing the embattled retailer’s share price to soar to 52.2 pence, up from the 29 pence on Friday.

Although the company could acquire up to 29.9 per cent in Footasylum, just below the mandatory takeover threshold, JD Sports said it does not intend to make an offer for its rival firm.

“This share purchase is a strategic investment for the group, which has confirmed today that it is not intending to make an offer for Footasylum,” JD Sports said.

“By publicly disclosing this, and as set out in today’s regulatory announcement, the City Code on Takeovers and Mergers precludes JD Sports from making any such offer unless specific circumstances change.”

The stake amounts to 8.67 million shares and its acquisition had come after Footasylum warned in January over pressure on full-year earnings, leading its shares to plunge.

Footasylum, which was started by JD Sports co-founder David Makin in 2005, had said its profit margins were hit by steep discounting during the holidays.

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