Mike Ashley’s Frasers Group has snapped up an 18.9 per cent stake in AO World in a £75million swoop – buying out shares held by troubled Odey Asset Management.
The deal makes Ashley’s retail empire the second-largest shareholder in the online electrical giant.
It comes just a week after Frasers, which owns brands such as Sports Direct and Evans Cycles, upped its stake in Asos to almost 10 per cent.
Michael Murray, Frasers’ chief executive and Ashley’s son-in-law, said the AO deal would enable the group to boost its online-only electronics offering.
Based in Bolton, AO World specialises in selling household products ranging from fridges to washing machines and televisions.
Buyout: Mike Ashley’s Frasers Group is now the second-largest shareholder in online electrical giant AO World after it snapped up an 18.9% stake
John Roberts, founder and chief executive of the business, said: ‘This is great news for AO and a fantastic endorsement for our business.
‘We look forward to realising the significant potential that we see for this partnership.’
Frasers is understood to have bought shares from Odey Asset Management, as the business continues to reel from the departure of founder Crispin Odey after allegations of sexual misconduct, which he denies.
Frasers said the deal comes after two years of talks with AO.
The retail empire, which Ashley built from a single sports store in Maidenhead, includes House of Fraser, Sports Direct, Jack Wills, Evans Cycles and menswear retailer Gieves & Hawkes.
And as of last week, Ashley holds 9.9 per cent of Asos shares – raising fresh questions about the future of the online fashion retailer, which is seen as a takeover target following a more-than-90 per cent fall in its share price in little over two years.
Asos, whose ownership of the Topshop brand is thought to be particularly attractive, is valued at just over £400million.
Analysts at Jefferies said Frasers’s interest in AO was ‘clearly more than opportunistic’ and a vote of confidence in the electricals retailer’s prospects.
AO World shares have slumped since the heights of the pandemic when consumers with extra savings invested in new tech.
Trading has been hit by shops opening up again, as well as rising costs and supply chain disruption hampering sales.
The business has subsequently left the under-performing German market and cut many senior and middle management positions to reduce costs.
AO World shares jumped 7.8 per cent, or 5.45p, to 75p yesterday. Frasers Group shares were flat at 684.5p.
