Frasers Group offers to buy fashion marketplace MySale

British retail giant Frasers Group has made a cash offer to buy Australian-based fashion marketplace MySale.

Frasers Group, whose portfolio of brands includes Flannels, Sports Direct, House of Fraser, and Jack Wills, became the biggest shareholder in MySale when it bought a 28.7 percent stake in the business in June.

The group announced Wednesday it has made an offer to buy the company at a price of 2 pence per share.

The offer values the share capital of MySale not currently held by Frasers Group at approximately 13.6 million pounds.

The offer represents a 5.7 percent discount on MySale’s share price of 2.69 pence as of August 16.

However, Frasers Group noted that its investment in MySale in June boosted that share price. When compared to MySale’s share price of 1.25 pence on June 28, the day before Frasers Group bought a stake, the offer represents a 60 percent premium.

Frasers Group said its plan to buy MySale would allow the group to “increase its presence in Australia and the surrounding regions at a faster rate than via organic growth”.

It also said the deal would allow the group to clear end of line products via MySale's established clearance channel.

Acquisition spree

Frasers Group has made a number of acquisitions in recent months as it continues to grow its high street empire.

So far this year, the group has bought fast fashion rivals I Saw It First and Missguided, as well as British value retailer Studio Retail.

Acquisition hungry Frasers Group swung to a pre-tax profit of 344.8 million pounds in the year to April 24, compared to a loss of 39.9 million pounds a year earlier.

Meanwhile, group revenue excluding acquisitions increased 30.1 percent to 4.75 billion pounds as the group benefited from shoppers returning to physical stores following the end of lockdown restrictions.

Based on its results, Frasers Group upped its FY23 outlook, though it warned that the “significant increase in general running costs” amid rising inflation and widespread supply chain challenges could persist.