Shares of XXL, the struggling Oslo-listed sports retailer, are reportedly surging after the company reported that Frasers Group, the UK-based parent company of Sports Direct, purchased 117.4 million shares of the company, bringing its total holding to 162.1 million.
The Norwegian sports retailer is reportedly dealing with financial difficulties and underperforming in the competitive market. This strategic acquisition is expected to provide a lifeline for XXL.
XXL’s new Group CEO, Freddy Sobin, joined the retailer this past spring.
BNN Breaking said in its reporting that acquiring a stake in XXL underscores Frasers Group’s ambition to extend its influence across Europe. BNN also said the move is expected to bring significant benefits for XXL, a company reeling from financial headwinds and stiff market competition.
XXL’s largest shareholder has been Swedish private equity firm Altor. BNN speculated that the recent acquisition by Frasers Group could potentially bring about a significant shift in XXL’s fortune.
“Analysts believe that the acquisition could mark a turning point for the struggling XXL,” BNN said in its reporting. “Frasers Group’s vast experience and substantial resources could provide the Norwegian company with the boost it needs to overcome its current challenges. However, it remains to be seen how this acquisition will play out in the long run and what impact it will have on the stakeholders involved.”
Photo courtesy XXL
