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That is a hell of a reduction recently by Marshall Wace since results published. A very good sign
I still think takeover bid imminent
Boohoo upgraded to Buy from Neutral at Panmure Gordon. Price target 70p
This is another good sign, plus Shorters closing further
https://twitter.com/baroninvestment/status/1659431200946110464?s=46&t=LZYHtt9O9lO7RV6oJu-Vkg
Shorts closing again I see.
Both boo and asos now sitting ducks for a takeover bid.
Think Ashley could’ve been buying more today - to try beat the Turks to the deal!
Shorts also reducing…
Exactly. Jose et al all bought shares within a day or two of last results. Not this time, as they are not allowed to if they are aware an offer is coming or whatever.
Speaks volumes.
The fact they even admitted in the press call they are ‘braced’ for a bid tells you everything you need to know.
Tonight Asos declined to comment to FT.
Also speaks volumes.
Why not just say there has been no approach - ‘we decline to comment’ is a giveaway!
People following the situation have heard rumours ASOS has attracted takeover interest from an international predator.
Some people following the situation have heard a company based in Turkey with a multibillion dollar valuation is the suitor stalking ASOS.
One person following the situation had heard the Turkish company has been holding talks with Bestseller, one of ASOS’s largest shareholders with around a 26pc shareholding, about making a joint offer for ASOS and made last year about a deal.
Could Mike Ashley now be preparing to quickly scupper this deal with his own hostile takeover bid?
Here he is, diving into the market on Monday and raising Frasers’ stake in Asos to 7.4 per cent from 5.1 per cent. Frasers (née Sports Direct) is Asos’s third-biggest shareholder. The biggest is Bestseller, the Danish retailer wholly owned by Anders Holch Povlsen, Scotland’s richest man, who’ll be banking another £90mn when the Numis sale to Deutsche Bank completes. Ashley stepped down last year as a Frasers director but retains a controlling stake, in addition to a big pile of money he gained from the 2021 sale of Newcastle United to an investor consortium led by Saudi Arabia’s sovereign wealth fund.
Asos declined to comment.
From FT tonight:
People following the situation have heard rumours ASOS has attracted takeover interest from an international predator.
Some people following the situation have heard a company based in Turkey with a multibillion dollar valuation is the suitor stalking ASOS.
One person following the situation had heard the Turkish company has been holding talks with Bestseller, one of ASOS’s largest shareholders with around a 26pc shareholding, about making a joint offer for ASOS and made last year about a deal.
Could Mike Ashley now be preparing to quickly scupper this deal with his own hostile takeover bid?
I think things will happen very quickly now. Asos execs already admitted at the press call they are ‘braced’ for a takeover bid at ridiculous current SP levels.
And a reminder of statements made by Ashley group when he first bought a chunk.
From bbc news:
The owner of Sports Direct has become the fourth-largest shareholder in online fashion retailer Asos.
Frasers Group, which is owned by billionaire Mike Ashley, now owns 5.1% of Asos after building up shares in the company that holds the Topshop brand.
The company has bought up a number of UK retailers over the past few years spanning sportswear, fashion, furniture and bikes.
"Frasers Group has extensive ambitions to grow the business inside and outside of the UK and is constantly exploring the potential for further expansion," the company said.
The retail giant added the move was the latest example of its "its drive to expand and acquire businesses and brands that can strengthen Frasers Group".
I think you may have your answer as to where the takeover will come from. More likely Ashley than Apollo. Ashley acting quick now though with the Apollo rumours
Shorts very exposed now. Ashley buying - I think he’ll quickly aim to become main shareholder now R TRowe sold a load. He’ll then make his move direct to shareholders. This is huge for him. The man has a big ego. He wants this.
A lot of chatter building about Apollo about to make a play for boohoo over on that board. Interesting.
May 16 (Reuters/PA PRESS BUSINESS) - The following are the top stories on the potential business prospects and story ideas.
- U.S. private equity firm Apollo Global tipped to make a play for youth fashion business Boohoo. Sources say Apollo now has advisors investigating the potential. AG said on Monday that it does not intend to make a takeover offer for
British oilfield services and engineering firm John Wood Group.
- Ofcom, Britain's communications regulator, said it launched an investigation on Monday into Royal Mail's failure to meet delivery targ
Yep it's happening.
Just looking at the PA and Reuters wires here in the news room at my day (night) job and now lots of calls in to Boo and Apollo by reporters here.
Anything could happen tomorrow.
https://www.proactiveinvestors.co.uk/companies/news/1015171/boohoo-in-the-shop-window-as-results-show-path-to-recovery-1015171.html
I'm in the city newsroom, checking Reuters wires. This just came up:
(Adds detail)
LONDON, May 16 (Reuters) - British online fashion retailer Boohoo sees a "clear path" to return to a profit margin of 6% to 8% in three years, its finance chief said on Tuesday.
"If you look at all of the reasons that our EBITDA margin went from 10% (in 2019-20) to 3.6% (in 2022-23), none of those reasons are structural," chief financial officer Shaun McCabe told Reuters.
"So what we expect to see over the course of the next three years is all of that coming back," he said.
Boohoo has been hurt by cost price inflation in raw materials, freight and energy.
"Now, when all of those prices are coming back down, we need to capture deflation," said McCabe.
"The walk that gets us back to the 6% to 8% that we've guided to for the medium term, we're very clear on the
components of that, we see a clear path."
McCabe was speaking to reporters after results today.
As well as Jefferies and Shore Capital, this statement from Gowling WLG…
Sarah Riding, retail partner at Gowling WLG, said there is still a clear path back to growth.
“Investors still have much to be hopeful for though as boohoo has proven it can return a significant profit and still has a large customer base, especially amongst younger generations who prefer the convenience of online shopping,” she said. “If the company can successfully close the gap on its margins while surviving the current pressures, then it's likely to get itself back to growth.”
This is a fantastic update, and has surprised the market.
As well as Jefferies today calling it a great performance, Shore Capital immediately now raise to a BUY and are extremely positive on this…
According to Shore Capital, the results beat consensus market expectations, and it raised the stock to 'buy' from 'hold'.
"Interestingly, the group reported a surprising net cash position of GBP6 million at the end of the period, contrary to the consensus expectation of net debt amounting to GBP60 million," Shore noted.
In financial 2023, boohoo expects revenue to be flat or to fall by as much as 5% from the prior year. The decline will be steeper in the first half, as the company increases its emphasis on making profitable sales. However, revenue growth is expected in the second half.
Yep, I can confirm, that was THEIR words, on the call to city reporters. They admitted a takeover could easily come and all they could do was address it when it came along. It could be from anywhere - big US company, look at the exchange rate! They can get an amazing company on the cheap. Combine this with the already dirt cheap SP then it's a cert.
Adam Cain, analyst at Pinsent Masons claims: "The current boom in UK public M&A activity will continue. The differential in valuations between the UK stock market and exchanges in countries such as the US continues to grow and an increasing number of overseas purchasers are identifying a large number of undervalued but extremely attractive UK listed companies that are trading at very low multiples. When this is combined with the relative weakness of sterling, it is clear that prevailing market conditions will continue to provide real opportunities for overseas acquirers to successfully execute Code compliant bids."
"Strategic buyers will also remain a key component of the UK public M&A landscape given they have large reserves of cash to deploy and are very focused on capitalising on a number of acquisition opportunities in the UK’s public markets," he said.
Cain said that prospective purchasers have "an increasing willingness" to "pursue a hostile takeover" of UK-listed companies.
"I see an increase in hostile activity taking place as a number of target boards and prospective purchasers may be unable to reconcile differences in valuation, with strategic bidders seeking to make their case directly to shareholders if management teams elect not to engage in a constructive manner on the grounds of an insufficient premium being offered to the company’s prevailing share price."
Asos : Berenberg cuts target price to 1000p from 1200p
But still double the current SP!
One other reminder - MIKE ASHLEY.
From BBC News just in the last year:
The owner of Sports Direct has become the fourth-largest shareholder in online fashion retailer Asos.
Frasers Group, which is owned by billionaire Mike Ashley, now owns 5.1% of Asos after building up shares in the company that holds the Topshop brand.
The company has bought up a number of UK retailers over the past few years spanning sportswear, fashion, furniture and bikes.
"Frasers Group has extensive ambitions to grow the business inside and outside of the UK and is constantly exploring the potential for further expansion," the company said.
The retail giant added the move was the latest example of its "its drive to expand and acquire businesses and brands that can strengthen Frasers Group".
I think you may have your answer as to where the takeover will come from.
"Asos may be a potential buyout target according to retail guru Clive Black at Shore Capital. Black and fellow analyst Eleonora Dani noted the low value of sterling might attract foreign interest.
Specifically, the American luxury department store Nordstrom was named as a potential buyer, while Black also highlighted a recent trend of traditional brick-and-mortar stores buying or building stakes in pure online players."
Watch this space. A bid is coming, mark my words...