FT Alphaville recommends A Corner Office, an old fashioned insider-y blog of City war stories, written anonymously. On Monday it had an intriguing post about eavesdropping. Here’s an extract:
I sat outside an out-of-the-way coffee shop in the sunshine last week half an hour early for a catch-up with an old mate. Old coat & jeans, full-on scruff these days now I’m not on the Buy side.
Two smartly dressed men of similar age sat next to me and launched into conversation, which sadly I only got half of because the softly spoken one was facing away from me.
Maybe they thought I was a tramp, but they were full of detail.
“So it’ll be 100% premium on the equity, making that £700m-ish…….we’ve got loads of cash to deploy so need to crack on as soon as the results are out…….we don’t want to work with XXXX because I hate them, and you’re the expert anyway…….I’ve got a raft of investors saying show me your next deal….Mike can do the lot, but we don’t want him to…..we’ll speak to ZZZZ*”
(We’ve confirmed that the blog author is a real person who knows the territory and has no obvious reason to be making stuff up. We take the protection of anonymity very seriously so your choice here is either to believe us or not.)
FTAV also recommends Betaville, an M&A gossip blog whose exclusivity is protected by a very high paywall. On Friday it ran an “uncooked” alert about the fashion retailer Asos regarding market speculation about stakebuilding and takeover interest. Here’s an extract:
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.
Rumour accuracy is undetermined but the timing wasn’t ideal. Asos shares this week hit their lowest since 2010 as brokers queued up to predict a cash call. Interim results the week before had laid bare the Topshop and Miss Selfridge owner’s problems with online fatigue, competition, overstocking, cost inflation and unprofitable overexpansion.
Asos now needs to rush through cost cuts without further damaging sales or going overdrawn on its recently extended credit line. There’s zero margin for error and little confidence left in management. Asos short interest (per IHS Markit) accounts for 22 per cent of the free float with very little borrow available:
But a UK retailer in distress is Mike Ashley’s bat signal. 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.
There’s also some history with Topshop and its previous owner Philip Green.
Asos said it doesn’t comment on the shareholdings of individual investors, and has a policy of not commenting on rumour or speculation. At pixel Asos had a market value of £431mn, or over half of £700mn-ish.
Further reading:— That Paul Kemsley, Philip Green and Mike Ashley pic… (FTAV, 2007)
