Frasers Group has announced that intends to make a voluntary offer to acquire 100% of shares at Norwegian firm, XXL ASA.

The retail group is XXL’s second largest shareholder, owning a 32.5% of the voting rights and 25.8% of the issued share capital.

Under the offer, Frasers has stated its intention to launch a voluntary offer for all of the shares that it does not already own, at NOK 10 (71 pence) a share, representing a 25% premium on XXL’s closing price on 5 December.

The offer comes after XXL, which provides sportswear to customers through 85 stores in Norway, Sweden and Finland, as well as online, planned to vote against a proposed rights issue of NOK 6 million, and proceed with an alternative transaction structure.

Frasers stated that it believes the alternative rights issue is "wrong", adding that its "legality is questionable” and that its implementation would be "extremely detrimental to both Frasers and other minority holders of XXL shares".

It also believes that shareholders “should not be asked to provide further funding” to XXL. When it has "not articulated any clear plan to address and resolve the root causes of its persistent problems".

Chief executive officer at Frasers, Michael Murray, said: "Our strategic vision and industry experience position us uniquely to help XXL navigate its current challenges. We are committed to ensuring that XXL reaches its full potential."

The announcement comes after Frasers failed to acquire Mulberry and was not able to see its owner, Mike Ashley, appointed as CEO at boohoo.

Investment analyst at AJ Bell, Dan Coatsworth, said that Frasers "has deal-making in its DNA" and that the latest deal shows that it is looking to "get another deal in before Christmas".

He concluded: "The approach is similar to Mulberry in that Frasers has fiercely criticised XXL’s fundraising efforts, this time implying the Norwegian retailer is making a bad decision with a reworked rights issue. A proposed 25% bid premium isn’t generous yet XXL is on its knees and Frasers is factoring in high risks associated with the company.

"XXL has the opposite problem to many UK retailers – rather than sitting on mountains of unsold inventory, it can’t get enough stock. The issue appears to lie in a shortage of money to pay suppliers and Frasers is offering to step in and provide stock and not take payment until it’s sold.

"This is classic Frasers behaviour. Use its position as a major shareholder to try and control a bad situation and make it good. Frasers is typically happy to go the extra mile with a company in trouble if it ultimately means gaining control on the cheap. Not many other retailers would be so brave, but that risk-taking is partially why Frasers is so successful as its gambles have often paid off."

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