The UK's largest sports retailer JJB Sports has agreed a £42m takeover deal for the discount chain TJ Hughes.

JJB said it planned to operate TJ Hughes as an independent division, and wanted to expand the chain further throughout the UK.

At present TJ Hughes stores - which sell clothes, homeware and small electrical goods - are based mainly in the north west of England.

"Under our ownership, we believe TJ Hughes will be able to fulfil its growth potential," JJB's chairman Dave Whelan said.

Expansion plans

JJB said it had identified 100 places in the UK where new TJ Hughes stores could be opened.

"We think their offering will work throughout the whole of the UK," said JJB chief executive Duncan Sharpe.

"But in the first 12 to 18 months we have got to batten down the hatches."

TJ Hughes had said last year that it was listening to possible takeover offers, after the company's profits were hit by stock control problems.

But JJB said it was confident that these difficulties had been overcome.

Investor doubts

JJB is offering 140p for each TJ Hughes share, a 4% premium on Thursday's closing price.

On the London market TJ Hughes' shares were up 3% at 138.5p in early trade on Friday.

But JJB's shares fell after analysts expressed worries about why the company was diversifying away from is core business.

Investment bank Schroder Salomon Smith Barney cut its rating on JJB Sports to "neutral" from "outperform" following news of the deal.

JJB shares closed down 42.5p at 367.5p, a fall of 10.4%.

The sports retailer also gave a trading update which showed turnover at stores open for at least 12 months growing 7% for the year to 31 January.

It added that like-for-like turnover at TJ Hughes's stores was up 3.5% in the year to 26 January.