Asos share price leaps after report of £1bn takeover bid
Asos‘s share price jumped 11.8 per cent this morning after a report emerged yesterday that the struggling retail chain received a £1bn takeover bid from a Turkish retailer backed by Chinese e-commerce giant Alibaba.
Trendyol, an up-and-coming fast fashion retailer, was understood to have approached Asos in late December, according to a report in The Sunday Times, whilst the brand was facing dwindling sales and operational changes.
The Turkish platform, which launched in 2010, is said to have been working with Morgan Stanley to make the offer, and also approached one of Asos’s leading investors, Danish billionaire Anders Povlsen, to see if he would be interested in participating in the deal.
The rumoured bid would value Asos at between £10 to £12 a share.
Both parties declined to comment on the report when City A.M. approached them for comment.
‘’Even though the talks are not believed to be currently active, the sniff of interest in Asos has seen the shares surge as, despite the difficulties Asos has encountered, Trendyol clearly spied further potential in the company,” Susannah Streeter, head of money and markets, Hargreaves Lansdown, told City A.M.
Commenting on the deal, Streeter said that being part of a larger group would mean “it could be insulated from some of the rough and tumble of the UK’s cost-of-living crisis and might be given a leg up into new markets.’’
Asos’s struggle has come as a shock to many who remember the brand as the rising star of the pandemic, but the brand has struggled to keep up that momentum.
The group engaged in a £75m cash call with investors late last month to repair its balance sheet, and last week the firm exited the FTSE 250 last Friday after its shares fell to a 12 month low.