British retail giant Frasers Group has increased its stake in online fashion retailer ASOS to 19.9%, fuelling speculation that it could be preparing a takeover bid..
Frasers, owned by Mike Ashley, has been gradually building up its holding in ASOS since April 2021, when it acquired a 5.1% stake. The group has since increased its stake to 11.1% in June 2022 and 15.3% in October 2022..
The latest increase in Frasers’ stake has raised eyebrows among industry analysts, who believe that the group could be preparing a takeover bid for ASOS. Frasers has a history of acquiring struggling retailers, including House of Fraser, and turning them around..
ASOS has been facing challenges in recent months, with the company issuing a profit warning in June 2023 and announcing plans to cut 500 jobs. The company has also been hit by the rising cost of living, which has squeezed consumer spending..
Frasers is believed to be interested in acquiring ASOS because it sees the company as a potential growth opportunity. ASOS is one of the largest online fashion retailers in the world, with a strong customer base and a global reach..
However, a takeover bid from Frasers could face regulatory hurdles. The Competition and Markets Authority (CMA) may be concerned about the potential for a monopoly in the online fashion retail market if Frasers were to acquire ASOS..
Despite the regulatory hurdles, Frasers is likely to be confident of its chances of success. The group has a track record of acquiring struggling retailers and turning them around. Frasers also has a strong financial position, with £1.1 billion in cash on hand..
If Frasers were to acquire ASOS, it would be a major deal in the UK retail sector. It would create one of the largest online fashion retailers in the world, with a combined revenue of over £5 billion..
The acquisition would also give Frasers access to ASOS’s strong customer base and global reach. Frasers could use this to cross-sell its other products and services to ASOS customers..
However, a takeover bid from Frasers could also be met with resistance from ASOS shareholders. ASOS is a publicly traded company, and its shareholders may not be willing to sell their shares to Frasers..
Frasers is likely to be aware of this, and it is expected to offer a significant premium to ASOS’s current share price in order to entice shareholders to sell..
It remains to be seen whether Frasers will make a takeover bid for ASOS. However, the group’s recent increase in its stake in the company has certainly raised eyebrows among industry analysts and investors alike..
