Blacks Leisure will briefly enter administration as part of a takeover deal 'prepack arrangement' that will wipe out the value of existing shares. The retailer's shares have now been suspended from trading on the London Stock Exchange.

It is now understood that JD Sports are the frontrunners in the bidding war to buy the struggling outdoors retailer. Dragon's Den star, Peter Jones, ruled himself out of the race earlier today.

Blacks received a number of final offers for the bulk of the business and is expected to announce a deal in the next few days. Blacks' stores will remain open for business as usual in the meantime.

The company owns 98 Blacks outlets, 208 Millets stores and the Peter Storm and Eurohike brands. It employs about 3,500 people.

Accountancy firm KPMG are expected to be appointed administrators, but only once details of an immediate onward sale of the company's key trade, assets and brands has been finalised.

A pre-pack administration is one in which the insolvent company has already arranged for a buyer of its profitable assets beforehand. It will also allow the firm to write off its £36m debts, and help it to close down loss-making parts of the business.

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