ASOS, the popular online fashion retailer, is facing a potential £1 billion takeover bid from Turkish company Trendyol. This comes at a difficult time for ASOS, as the fashion market is struggling and the company’s share price is falling. Although the initial offer was rejected, ASOS remains vulnerable to further takeover attempts.

Trendyol, which is backed by Chinese giant Alibaba, approached ASOS in December with a valuation of £10 to £12 per share. However, the current share price of ASOS is only £3.50, highlighting a significant gap in valuation. So far, neither ASOS nor Trendyol have made any official comments regarding the bid.

ASOS has been grappling with challenges in the online retail market, and recently faced the withdrawal of credit insurance, which has put pressure on its cash flow. This situation could potentially lead to suppliers demanding upfront payment, further straining the company’s financial situation. Additionally, ASOS has experienced a sharp decline in its share price, plummeting by 93% over the past two years.

To address its financial struggles, ASOS raised £75 million through a share placing and secured £275 million in debt facilities from Bantry Bay, a specialist lender supported by hedge fund Elliott Advisors. The largest shareholder in ASOS, Anders Holch Povlsen, who owns a 26% stake, supported the share-based capital raise. Trendyol approached Holch Povlsen to gauge his interest in participating in a takeover, but his representative declined to provide any comments.

Another significant shareholder in ASOS is Mike Ashley of Frasers Group, which holds a 7.4% stake. Frasers Group expressed disappointment when its CEO, Michael Murray, suggested further investment in ASOS, which would have given Frasers an additional 5% stake and closer cooperation to leverage Frasers’ retail expertise. Frasers Group emphasized that this was not an attempt to take over ASOS. However, Frasers was surprised by ASOS’s decision to secure financing through alternative means.

There is ongoing speculation that Holch Povlsen may consider taking ASOS private, and Frasers Group maintains its interest in the company. This has created anticipation for future news regarding ASOS’s ownership and potential partnerships.

For more information on the topic, please visit the following links:
1) BBC: ASOS targeted by Turkish company Trendyol in £1bn takeover bid
2) Reuters: Turkey’s Trendyol approaches Britain’s ASOS with £1 billion takeover bid