Frasers Group withdraws takeover bid for Norwegian sports giant

Frasers Group has dropped its takeover offer for Norwegian sporting goods chain XXL Sports & Villmark.

The Sports Direct owner, which is the chain’s second largest shareholder, holding a 25.8% stake, said in December that it was planning to submit a bid for 10 kroner for every share of equity that it does not own.

In an update on Thursday (20 February), Frasers said it would not proceed with the bid, that would value the retailer at around £17.45m.

“Through correspondence with XXL, Frasers has been informed that XXL’s other large shareholders would not accept the intended offer if made,” it said in a statement on the Oslo Stock Exchange.

“As a result, Frasers has concluded that the condition requiring acceptance of the intended offer by a sufficient number of shareholders to ensure Frasers would hold more than 50% of XXL’s shares and votes on a fully diluted and converted basis would not be fulfilled.”

The retail giant claimed in December, when it announced a possible takeover bid, that it has the “relevant experience to have a chance at saving XXL”, which has been suffering with profitability challenges in part due to stock availability issues.

It said, subject to satisfactory due diligence and completion of the offer, that it was willing to provide support XXL’s stock shortage by cosigning up to £35m (500m kroner) of stock on a delayed payment basis whereby XXL will not be required to repay Frasers until the stock is sold.

Click here to sign up to Retail Gazette‘s free daily email newsletter