In a surprising move, Turkish online retailer Trendyol, backed by Chinese giant Alibaba, has submitted a takeover bid worth £1 billion for UK-based online fashion retailer ASOS.
The offer, made in December of last year, values ASOS at £10 to £12 per share, significantly higher than its recent closing price of £3.50.
According to reports from The Sunday Times, Trendyol has enlisted the services of Morgan Stanley to assist with the bid. However, there are currently no active negotiations taking place between the two companies. It is believed that Trendyol has reached out to ASOS’s largest shareholder, Anders Holch Povlsen, the owner of Bestseller, to gauge their interest in participating in the deal.
Heartland, Povlsen’s investment vehicle, has chosen not to comment on the speculation surrounding the potential takeover bid. ASOS’s recent struggles in the market have led to a drop in its stock price, resulting in the company being removed from the FTSE 250 index. The online retailer has also experienced significant losses, necessitating a £75 million fundraising effort from investors.
ASOS reported an adjusted loss of £69.4 million for the six months ending on February 28, 2023. This marked a stark contrast to the profit and adjusted profit before tax of £87.4 million achieved in the same period the previous year. Furthermore, the group’s revenue declined by 8%, reaching £1.8 billion during the mentioned period, down from £2 billion in the corresponding period in the previous year.
The potential takeover bid from Trendyol presents an intriguing opportunity for ASOS, whose financial performance has been under scrutiny recently. The online fashion retailer will carefully consider the offer and its implications as it weighs the best path forward for the company and its shareholders.