Boohoo raises just under £200m for M&A

The company, which announced the launch of the placing late on Thursday, raised £197.7m at 340p per share.

Boohoo said it intends to use the net proceeds "to take advantage of numerous opportunities that are likely to emerge in the global fashion industry over the coming months".

"The group continues to review a number of possible M&A opportunities and will update shareholders as required."

The company also gave a brief update on trading in May, saying it remains "robust". Nevertheless, Boohoo is still cautious about the outlook "as a result of the uncertainty caused by the Covid-19 pandemic together with the impact of lifting lockdown restrictions and the potential influence on competitive behaviour for the remainder of the year".

Boohoo, whose recent acquisition include Karen Millen, Coast and Nasty Gal, said it was not currently appropriate to provide guidance for the financial year ending 28 February 2021 given the continually evolving pandemic.

Broker Liberum noted that Boohoo’s strategy has been to find brands that have fallen foul of the structural challenges that digital has brought, but where the brands themselves are strong, have a loyal customer base and offer advantages to Boohoo in multi-ways.

"These have come from customer diversification, alternate price points, geographical spread and maybe more importantly, can significantly improve from Boohoo’s design and supply chain. It has not bought brands + stores and this will not change so a transaction will likely incur the ownership of the brand and maybe the digital assets but certainly all the brand rights.

"So the sum of £200m gives it significant clout and we see the potential for many deals but within this we suspect some large brands could be acquired. We have our suspicions which some of these are, but won’t add to the speculation this morning."

Independent retail analyst Nick Bubb said: "It didn’t spell out what it had in mind, but being able to buy Topshop.com, for example, from the wreckage of the Arcadia fashion empire would be a decent prize…and Boohoo had no problem in getting support from the City, as it has announced first thing that the placing has been completed at 340p, only a modest discount to the overnight close of 351p."