Frasers doesn't quit: Why it's determined to scoop up Norwegian retailer XXL
Back in December, Frasers Group announced it was submitting a takeover bid for Norwegian sporting goods retailer XXL. After failing to get the support of major shareholders, it's back with plans to make a mandatory offer.
Frasers, already has a 28.5% stake in XXL, making it the second largest shareholder.
XXL said that Frasers Group has been allocated 21.6 million A-shares in XXL ASA's fully underwritten rights issue, and an additional 777,289 A-shares as compensation for the group's guarantee in the issue. This brings the British retail giant's stake to 32.9% of all shares.
With this, Frasers Group will surpass the 1/3 ownership threshold under Norwegian securities law, triggering a mandatory bid for the remaining shares.
XXL sells both online and in around 90 stores across Norway, Finland, Sweden, Denmark and Austria, selling a range of products for sports, skiing, biking and other outdoor activities, including sportswear, footwear, health and fitness and sports technology products. The company has several subsidiaries, including XXL Sport og Villmark AS.
Back in December, when it first made a bid for the retailer, Michael Murray (pictured), CEO of Frasers Group, said: "Our strategic vision and industry experience positions us uniquely to help XXL navigate its current challenges. We are committed to ensuring that XXL reaches its full potential."
Despite cutting its profit outlook in December blaming ‘weaker’ shopper confidence leading up to and since the government’s autumn Budget, Frasers has recently been ramping up its international expansion, with deals in the Netherlands, Australia/New Zealand and Africa. In February, itt signed a deal with fellow retail conglomerate GMG to bring British sportswear retailer Sports Direct to the MENA region as it continues ambitious expansion plans.
The group said it is now on track for adjusted pre-tax profit between £550 million and £600 million for the current year. It had previously predicted it would be between £575 million and £625 million.
