06 Dec, 2024 08:30 06 Dec, 2024 10:05

Frasers launches bid to take over Norway's XXL

Mike Ashley’s Frasers Group said on Friday that it was launching a voluntary offer for all the shares in Norwegian sporting goods retailer XXL that it does not already own at 10 Norwegian kroner per share.

Frasers Group

745.00p

16:35 03/06/25

1.50%

11.00p

FTSE 100

8,787.02

17:09 03/06/25

n/a

FTSE 350

4,816.29

17:14 03/06/25

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FTSE All-Share

4,766.13

17:14 03/06/25

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General Retailers

4,526.00

17:14 03/06/25

-0.42%

-19.30

The offer values XXL at approximately NOK246.36m.

Frasers is currently the second largest shareholders in XXL with an interest of just under 26%.

Chief executive Michael Murray said: "Our strategic vision and industry experience position us uniquely to help XXL navigate its current challenges. We are committed to ensuring that XXL reaches its full potential."

Dan Coatsworth, investment analyst at AJ Bell, said: "Frasers has deal-making in its DNA and has the itch to get another deal in the bag before Christmas. Having failed to buy Mulberry and been pushed back with efforts to overthrow the regime at Boohoo, will it have more luck with sporting goods group XXL?

"The approach is similar to Mulberry in that Frasers has fiercely criticised XXL’s fundraising efforts, this time implying the Norwegian retailer is making a bad decision with a reworked rights issue. A proposed 25% bid premium isn’t generous yet XXL is on its knees and Frasers is factoring in high risks associated with the company.

"XXL has the opposite problem to many UK retailers - rather than sitting on mountains of unsold inventory, it can’t get enough stock. The issue appears to lie in a shortage of money to pay suppliers and Frasers is offering to step in and provide stock and not take payment until it’s sold.

"This is classic Frasers behaviour. Use its position as a major shareholder to try and control a bad situation and make it good. Frasers is typically happy to go the extra mile with a company in trouble if it ultimately means gaining control on the cheap. Not many other retailers would be so brave, but that risk-taking is partially why Frasers is so successful as its gambles have often paid off."