Businessman and former Newcastle United owner Mike Ashley’s empire has bought up a large stake of one of Bolton’s biggest companies.
This comes after Frasers, part of Mr Ashley’s retail business and parent firm of Sports Direct, House of Fraser and others, bought an 18.9 per cent stake in Middlebrook-based AO.
The stake is worth around £75m with Frasers having bought 109.4 million AO shares in a deal announced after markets closed on Friday, June 2.
AO founder and chief executive John Roberts said: “This is great news for AO and a fantastic endorsement for our business.
“As we continue to build on our strategy of pivoting to profitable growth, it will be hugely exciting to have a range of compelling strategic opportunities to explore together and we’re very much looking forward to working with Michael and his team.”
AO's Bolton headquarters (Image: Newsquest)
The deal is said to have come after two years of talks between Frasers and AO.
The acquisition includes shares in the technology retailer previously owned by crisis-hit hedge fund Odey Asset Management, it is understood.
The fund sold off its stake to raise money amid the fallout from misconduct allegations against its founder Crispin Odey, who left the fund over the weekend.
Mr Odey denies the allegations.
Frasers, which is majority-owned by Mr Ashley, has a history of investment partnerships in other retail brands, such as Asos and Hugo Boss.
Frasers chief executive Michael Murray said: “Frasers has long admired what John and the AO team have built and we are delighted to have the opportunity to form a supportive, strategic partnership.
ALSO READ: Bolton online business ‘cautiously optimistic’ as cost-cutting boosts profits
ALSO READ: Bolton firm launches recruitment drive for 250 jobs with a £24K starting salary
ALSO READ: Bolton company's cost-cutting bears fruit as it issues new statement
“AO is a fantastic business with a clear strategy which is leading the market in online-only electricals.”
Shares in AO jumped 7.5 per cent higher as a result on Monday morning, while Frasers shares improved by one per cent.
Jefferies equity analyst Andrew Wade said: “Frasers’ interest in AO is clearly more than opportunistic and with AO’s pivot-to-profit strategy putting the business in a much stronger position, we are inclined to see this development as a catalyst for collaboration between the two businesses, as well as further recognition that AO’s shares offer upside potential.”
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel