Shares of U.S. sports retailer Finish Line Inc (NASDAQ:FINL) spiked in early morning trading on Monday after the company publicly announced its intentions to be acquired by British sports retailer JD Sports Fashion. In fact, Finish Line stock is currently up 30% on the news.

Interestingly enough, as of this writing, the stock is actually trading above the implied takeover price ($13.69 currently versus $13.50 takeover price).

The only reason stocks trade at a premium to their implied takeover price is if investors are expecting a bidding war to ensue. That is exactly what we will get with FINL stock. And that means there is more upside left in shares of Finish Line.

Here’s a deeper look.

The Clash Of British Sports Retail Titans

There are two major sports retailers in the United Kingdom: JD Sports and Sports Direct International. JD Sports addresses more of the premium-end market, while Sports Direct attacks the more mainstream market. But for all intents and purposes, the two are direct competitors.

And both want to enter the huge U.S. sports retail market.

Over the past year, Sports Direct has built a massive stake in Finish Line stock. That led many to believe that a Sports Direct acquisition of FINL wasn’t a matter if, but rather a matter of when.

Indeed, I wrote back in February that Sports Direct buying Finish Line was one of the most likely outcomes for Finish Line stock.

Sports Direct, though, acted too slow. Instead, JD Sports has swooped in and scooped up all of Finish Line stock in one big offer. So much for Sports Direct’s slow accumulation of FINL stock.

But this isn’t the end of this narrative.

Sports Direct has long been the king of the British sports retail market. Recently, though, JD Sports has become Britain’s largest sports retailer by market value. If JD Sports does successfully acquire Finish Line and Sports Direct just sits idly by, then JD sports will only strengthen its partnerships with important athletic brands like Nike Inc (NYSE:NKE) and extend its leadership position over Sports Direct.

In other words, Sports Direct could get left in the dust if JD Sports acquires Finish Line. As the physical retail world is shrinking, being left in the dust is the last place you want to be (just look at the number of sports retail bankruptcies in the U.S.).

From this perspective, there is no way Sports Direct sits idly by and watches its intentions to acquire FINL go out the door with a JD Sports acquisition. Sports Direct will likely counter the JD Sports’ offer with a bigger offer. That offer will be countered by an even bigger offer from JD sports. And so the back and forth will ensue.

Bottom Line on FINL Stock

Most investors who closely watched Finish Line stock knew that this thing was going to get a buyout offer. But mostly everyone thought that buyout offer was going to come from Sports Direct.

Instead, it has come from Sports Direct’s biggest competitor, JD Sports. That sets the stage for a bidding war between Sports Direct and JD Sports. Both of these British sports retail giants want a piece of the U.S. market. And neither wants to get left behind, because being left behind means taking one step closer to a Sports Authority like outcome.

Overall, then, the incentives are there for both Sports Direct and JD Sports to engage in a pretty intense bidding war over Finish Line stock. That means FINL stock should trend higher over the next several months with each upped offer.

So don’t be afraid of FINL stock here, even though its trading above JD Sports’ $13.50 offer. There is a good reason for that.

As of this writing, Luke Lango was long FINL.