An investor group that includes Jynwel Capital and funds affiliated with the Abu Dhabi government is launching a bid to buy Reebok from Adidas for about €1.7 billion, according to the Wall Street Journal.
The investors are expected to argue that Reebok would do better if it were managed independently.
The investors believe Reebok would benefit from management and ownership that would be better able to focus on improving Reebok’s business in the US outside the scrutiny of public shareholders, but want to maintain Reebok’s current strategic path and keep its top executives.
The investor group also wants to give Reebok more financing for marketing and store rollouts.
Adidas spokespeople did not immediately return emailed requests for comment. A Jynwel Capital spokesperson said, “We continually evaluate unique investment opportunities globally but we don’t comment on rumors or speculation.”
The group first approached Reebok’s management late last year about establishing a joint venture to roll out high-end fitness brands and build dozens of stores in the United States and internationally.
The investor group later decided to make a bid for the entire Reebok business as the discussions progressed, the Journal reported. It is unclear which Abu Dhabi fund would partner with Jynwel should the Reebok bid succeed, nor how receptive Adidas might be to the bid.
Germany’s Adidas, the world’s second largest sports apparel firm, bought the US-headquartered Reebok in August 2005 for $3.8 billion. It enjoyed initial success with a range of toning shoes, but has since struggled.
Shares in Adidas surged 5.6 per cent following the report.
Reuters
