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Frasers Group PLC announced Friday plans to acquire Norwegian sports goods retailer XXL ASA for approximately 246.4 million Norwegian krone ($22.3 million). The deal follows XXL’s failed attempt to secure funding through a 600 million krone rights issue in November.

Terms of the Offer

Frasers, already the second-largest shareholder in XXL, intends to launch a voluntary offer to purchase all remaining shares of the Oslo-listed company at 10 krone per share. This represents a 25% premium over XXL’s closing share price of 8 krone on Dec. 5.

The acquisition is expected to complete by March 2025, subject to regulatory approvals. Legal advice for Frasers is being provided by White & Case LLP and Oslo-based law firm Advokatfirmaet Schjødt AS.

XXL’s Financial Struggles

XXL’s financial troubles intensified after shareholders rejected its proposed rights issue of 600 million krone on Nov. 6. The retailer’s fallback plan, unveiled on Nov. 19, involved creating a new entity to own XXL’s equity and assets, with funding from a rights offering.

Frasers strongly opposed this plan, arguing it would dilute the investments of non-participating shareholders by 99%. The British company acted swiftly to present its acquisition offer, framing it as a preferable alternative that allows shareholders to monetize their stakes.

Strategic Vision for XXL

Michael Murray, CEO of Frasers, expressed confidence in his company’s ability to help XXL recover.

Frasers, which holds 32.5% of XXL’s voting rights and 25.8% of its issued share capital, has also proposed several measures to address XXL’s liquidity issues. These include providing 500 million krone worth of products on a sale-or-return basis and exploring stock consignment arrangements.

XXL’s Response

XXL acknowledged Frasers’ announcement and stated its board would review the offer and its implications on the ongoing equity financing process. XXL is a leading sports retailer in the Nordics, with operations in Norway, Sweden, and Finland through physical stores and e-commerce platforms.

Financial and Legal Advisors

Danske Bank is serving as financial adviser to Frasers. Counsel information for XXL was not immediately available.

Broader Implications

The acquisition signals Frasers’ growing ambitions in the international retail market, particularly in the Nordics. If the offer proceeds, it will mark another major step in consolidating Frasers’ presence in the global sports and fashion retail sector.