Asos shares jump after reported £1bn bid from Turkish rival

Asos has seen its shares surge higher after it reportedly received a £1 billion takeover approach from a firm backed by China's Alibaba

ASOS has seen its shares surge higher after it was reported that the troubled online fashion firm had received a £1 billion takeover approach from a firm backed by China's Alibaba.

The retailer was approached by Turkish online fast fashion firm Trendyol in late December, according to a report in the Sunday Times.

It is believed that the proposed deal would have valued Asos at between £10 and £12 a share.

Talks are not thought to be active but news of the recent bid interest sent shares in Asos jumping 15 per cent higher at one stage in Monday morning trading.

Trendyol - which in 2021 raised £265 million from Alibaba and $1.5 billion (£1.2 billion) from other investors including SoftBank and the Qatar Investment Authority - is said to have been working with advisers from Morgan Stanley on the approach.

Asos has seen its shares tumble as sales have languished and costs rocketed, with customer spending coming under pressure and shoppers returning to the high street.

It was booted out of the FTSE 250 in the recent FTSE reshuffle due to its hefty stock market declines.

The group was last month forced to raise funds in order to strengthen its balance sheet, with a £75 million investor cash call, as well as entering into a new £275 million debt facility.

The capital raise was backed by Danish billionaire Anders Holch Povlsen, who is Asos's biggest shareholder with a 26 per cent stake.

Trendyol had approached Mr Povlsen about whether he would be interested in joining a possible takeover offer, the Sunday Times reported.

Asos declined to comment on the reported takeover interest.

The group earlier this month revealed losses of more than £290 million for the half-year to February, as it booked costs from restructuring efforts and lower sales as customer spending comes under pressure.

Asos will use its fresh funding for a turnaround plan being led by chief executive Jose Antonio Ramos Calamonte, which will include shaking up the company's approach to buying and merchandising, and giving the firm more financial headroom.