Mike Ashley’s retail behemoth Frasers Group, the owner of Sports Direct and major Boohoo shareholder, has announced that it will no longer proceed with its intended offer for Norwegian sporting goods retailer, XXL ASA.
In an announcement shared via the Oslo Stock Exchange at the weekend, Frasers said that the offer had been subject to several conditions, and thus it “reserved the right not to proceed” if it “became evident that any of the specified conditions would not be fulfilled”.
The decision to step back came as XXL’s other large shareholders made it known that they would refuse to accept the offer if it was made.
This appeared to mean that the condition requiring a sufficient number of shareholders to back Frasers in its pursuit of snapping up more than 50 percent of XXL’s shares would not be fulfilled.
The Sports Direct owner, which already owns 25.8 percent of XXL’s share capital, had initially sought to acquire the company’s remaining shares at a price of NOK 10 per share, amounting to around 17 million pounds.
It made an attempt to takeover XXL after the firm proposed an alternative transaction structure that Frasers deemed to be “wrong”. The group questioned the legality of the plan, and called its possible implementation “detrimental to both Frasers and other minority shareholders”.
Noting that XXL was “short of sufficient funds to pay its suppliers”, Frasers said its proposed takeover was a “solution for this cash shortage which also helps with the stock shortage”.
The failed takeover is another setback for Frasers on its mission to take over some of the world’s biggest fashion retail brands. The company has been locked in a bitter dispute with Manchester fast-fashion giant Boohoo, where it is the largest individual shareholder, since it attempted to force wholesale boardroom changes last year.
Most recently Boohoo’s other shareholders decisively rejected Frasers Group’s attempts to remove Mahmud Kamani, the company’s founder and group executive vice chair, from the board of directors for a second time.
At a general meeting in Manchester in January, 63.17% of the votes cast opposed the resolution to dismiss Kamani, with only 36.83% in favour. The total votes represented 79.67% of the company’s issued share capital, with a fraction of votes withheld.
