Asos being gobbled up by Amazon?

8 October 2014

bw asos We've spoken about the troubles that online clothing vendor Asos have been having, but their shares looked up today amid rumours that they're going to be taken over by enormo retail monster Amazon.

Presumably Amazon have a fair bit of money hidden under the bed to complete any takeovers.

Asos recently issued three profit warnings, but saw shares rebound 304p to 2227p as UBS told clients to buy with a 4050p target. Nice.

According to a broker: “Global online fashion is becoming more competitive. Scale and platform are paramount, and we think significant value could be added to Asos via a combination with a larger online retail organisation."

"We think Amazon might be the best fit and could pay £50 per share. It intends to increase its international and clothing exposure and is not averse to consolidating the online retail space. An acquisition of Asos would give access to a fashionable, low price own label offering."

It could be what Asos needs, as their cost-cutting exercise has been cheesing off their suppliers and still not really helping the company make a profit.

What do you think?

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