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(Alliance news) - High street retailer Frasers Group PLC on Monday said it bought a strategic stake in online electricals retailer AO World PLC.
The Shirebrook, England-based owner of the House of Fraser, Sports Direct and Flannels retail chains bought a 19% stake in AO World with the purchase of 109.4 million shares at a price of 68 pence each. This totalled an investment of GBP75 million.
AO World shares were up 4.2% at 72.50 pence each on Monday morning in London. Frasers shares were up 1.6% at 695.50p.
Frasers said the investment was the "culmination of productive talks over the last two years about establishing a strategic partnership".
Chief Executive Officer Michael Murray said: "Frasers has long admired what John and the AO team have built, and we are delighted to have the opportunity to form a supportive, strategic partnership. AO is a fantastic business with a clear strategy which is leading the market in online-only electricals. Through this investment, Frasers will benefit from AO's valuable know-how in electricals and two-man delivery, helping us to drive growth in our bulk equipment and homeware ranges. In turn, AO will have the opportunity to benefit from Frasers' expertise and ecosystem."
By Xindi Wei, Alliance News reporter
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