Frasers Group takes control of XXL ASA amid liquidity and supply chain challenges

British fashion giant Frasers Group has taken over XXL ASA after its largest shareholder divested its shares. The news comes on the back of the Norwegian sporting goods retailer announcing that it is in need of short-term liquidity “in order not to breach its financial covenants”.

Frasers, which had been pursuing a takeover of XXL since 2024, has now received the necessary acceptances for its mandatory offer of the company that will result in the group controlling more than 92 percent of the share capital and 90 percent of the voting shares of XXL.

Frasers is anticipated to hold a total of over 64.6 million voting A shares and over 17 million non-voting B shares of the company. The offer had already been approved by Norway’s Financial Supervisory Authority in April, which backed the offer to acquire all of the issued and outstanding shares in XXL for NOK 10 per share.

In a separate release, Altor Fund, a now former majority shareholder of XXL, said it had opted to sell its over 40.5 million shares in the company to Frasers “given the current situation and the increasing short-term challenges”, partner and head of Norway, Øistein Widding, said in a statement.

‘No guarantee that XXL can be saved in its current form or at all…’

Earlier this week, XXL said it was in need of short-term liquidity and was further experiencing supply chain delays which caused slower topline growth. “This situation has resulted in higher-than-expected working capital requirements for the group,” a regulatory filing revealed. The company said it was planning a private placement of new shares at NOK 10 per share to raise gross proceeds amounting to a maximum of NOK 200 million to repay a bridge financing.

Frasers had initially offered to conditionally provide XXL with a NOK 200 million shareholder loan, or to provide a NOK 200 million guarantee as security for the new bridge loan from the company’s lending banks. The company had already long offered to “provide support to help XXL navigate its challenges over the past 18 months”, yet having “been rebuffed”, Frasers said it believes this situation “could have been avoided”.

“In the meantime, XXL has not been able to execute on its proposed turnaround plan and XXL's financial and trading position has continued to deteriorate,” a filing added. “As a result, Frasers is acquiring a business which is in significant distress. As such, all stakeholders, including but not limited to, brand partners, landlords, suppliers and partners, will need to work collaboratively with Frasers in its efforts to save the XXL business in its current form.”

Frasers said that while it “does not currently have sufficient information to be able to determine how much of a viable proposition XXL in its current form is”, it does intend to try and stabilise the business. Frasers did note, however, that “there is no guarantee that XXL can be saved in its current form or at all”.