Shares of Frasers Group PLC (LON: FRAS) gained 2% on reports that the British retail company has reportedly placed a £30 million take bid for Dave Whelan’s DW Sports.
Fundamental analysis: Ashley shopping again
DW Sports, a company that currently owns 73 gyms and 75 stores, went into administration earlier in August, placing more than 1700 staff at stake. This has been seen as an opportunity by Mike Ashley, the owner, and CEO of Frasers Group, to make an offer to the administrator of DW Sports.
This is not the first time that Ashley made such an offer to companies that are experiencing a crisis. In the past, Ashley has made similar acquisitions including Jack Wills, Evans Cycles, and House of Fraser.
Administrators at BDO have reportedly asked about £20 million, however, there are rumours that Whelan’s family are looking to repurchase the business. The Whelans, who used to own Wigan Athletic, are owners of Fitness First as well, which hasn’t been affected by the breakdown.
In case Ashley manages to acquire the company, the Frasers Group would take over 880 new stores. Last October, the retailer reported a 14% increase in half-year sales to £2 billion, while the annual reports got delayed as auditors asked for more time.
At the start of the month, the group was also eyeing to take over 30 stores from its UK rival Debenhams. Mike Ashley showed his interest in acquiring Debenhams but has failed at least two times.
There have been speculations that the coronavirus pandemic has played a big role in diminishing Ashley’s interest in taking over Debenhams’ stores.
Technical analysis: Failure at GBX300
Frasers Group share price jumped 2% on reports that
