Mike Ashley's Frasers Group sells its entire stake in French Connection
Mike Ashley's Frasers Group sells its entire stake in French Connection as the embattled fashion chain becomes a takeover target.
Mike Ashley's Frasers Group has sold its entire, near-25 per cent stake in French Connection as the embattled fashion chain was targeted by two potential buyers.
On Friday, French Connection revealed that it had been approached regarding a takeover by retail investor Spotlight Brands, with backing from restructuring and investment group Gordon Brothers.
It has also received another potential proposal from brand investment platform Go Global Retail.
This morning, the struggling retailer revealed that Frasers Group sold its entire 24.93 per cent stake in the company on Thursday last week - when French Connection shares rose more than 35 per cent at one point.
The following day, on Friday, French Connection confirmed it had received two offers, sending shares soaring another 65 per cent - which means Ashley missed out on some gains.
French Connection shares rose another 15 per cent on Monday morning, although by the end of the day they turned negative, falling 2.7 per cent to 25p. Frasers Group shares fell almost 2 per cent to 468.60p towards market close.
French Connection's biggest shareholder is its boss Steven Marks, with a 42 per cent stake, while Frasers Group was the second before today's sale.
Frasers had acquired its stake in 2017 as part of a growth plan which has seen it since buy stakes in brands including Hugo Boss and Mulberry.
French Connection investors will be hopeful that the confirmed takeover interest could result in a bidding war for the high street retailer.
The company has been struggling with dwindling footfall, sales and profits for a number of years and has been battling to keep up with online-based rivals like Asos and Boohoo.
The retailer has had to shut shops at various points for lockdowns since the coronavirus outbreak.
In October, French Connection revealed it had sunk to an underlying loss of £12.2million in the six months, against a £3.6million loss by the same point the year before.
The chain, which was founded by Stephen Marks in 1972, said in December it had seen 'encouraging' sales after some stores were able to reopen, before the latest national lockdown came into force in January.