Shares of struggling online retailer Asos rose 7 percent after media speculation of an alleged takeover bid.
According to the Sunday Times, the company received a $1.24 billion takeover bid in December from Trendyol, a Turkish online competitor backed by Chinese e-commerce giant Alibaba ) receive. According to the newspaper, the company worked with Morgan Stanley to draft the offer and also reached out to Asos’ largest shareholder, bestseller owner Anders Povlsen, to find out if he was also interested in a stake in the deal.
Such a move has sparked speculation about a possible Asos bidding war and comes amid further reports that the company’s suppliers have begun reducing their shipments after the company’s credit insurance was said to have been withdrawn.
Suppliers cut provisions
The Times cited a number of anonymous suppliers who said they stopped supplying the retailer as it struggled to maintain profits and said they stopped the process until insurance came back. Asos said in its own statement that despite the tightening of its trade credit insurance, it has not seen any impact on its trade.
The retailer is among many companies grappling with mounting losses and slumped sales in the wake of the pandemic, largely due to falling consumer confidence and supply chain disruption.
Frasers increases stake to 9 percent
Last month, the company secured a $75 million capital raise from three of its shareholders, including Povlsens Aktieselskabet Af, to return the company to sustainable profitability and a flexible balance sheet.
Also, in a bid to increase its hold over Asos, Povlsen’s direct competitor, the Frasers Group, has increased its stake in the company to almost 9 percent, bringing the group one step closer to the possibility of avoiding a takeover bid. The British retailer has already further increased its stake in Asos over the past year, suggesting it may consider adding the retailer to its ever-expanding portfolio.
This translated and edited post previously appeared on FashionUnited.uk.