Frasers Group, the retail conglomerate owned by billionaire Mike Ashley, has further increased its investment in struggling online fashion retailer ASOS. The company now holds almost 10% of ASOS, up from 8.8% earlier in the week and 7.4% at the beginning of the week. This move brings Frasers Group closer to a 10% stake, which would give it the power to block a mandatory purchase of shares following any potential takeover offer.

Frasers Group has not issued any comments regarding its increased investment, but this development cements its position as the third-largest shareholder in ASOS. The investment comes at a time when rumors have been circulating about ASOS being a potential target for a takeover. Reports suggest that Turkish e-commerce platform Trendyol, backed by Alibaba, approached ASOS about a potential £1 billion ($1.38 billion) buyout last year. Furthermore, Danish billionaire Anders Holch Povlsen, ASOS’s largest shareholder, is also rumored to be considering a buyout offer.

ASOS has been undergoing a turnaround phase under the leadership of CEO José Antonio Ramos Calamonte, who took over last summer. The retailer has faced challenges, as indicated by its recent trading figures which showed a loss of £291 million ($401 million) in the six months leading up to February 28, following an 8% decline in sales. In an effort to strengthen its finances, ASOS recently raised £80 million ($110 million) through a placing and retail offer, and renegotiated a £275 million ($380 million) credit line.

Market reactions to the news were mixed, with ASOS shares ending Friday down 4.5% at 325.1p, while Frasers Group shares remained unchanged at 685.9p. The future of ASOS remains uncertain as it deals with a challenging retail environment and potential takeover offers. Frasers Group’s increased stake in ASOS showcases its confidence in the long-term prospects of the online fashion retailer and its intention to have a significant role in shaping its future. It will be intriguing to observe how ASOS responds to these developments and whether any potential takeover becomes a reality.

Useful links:
1. Reuters: Frasers Group increases stake in ASOS
2. Bloomberg: Frasers Group holds about 10% stake in ASOS