Asos Jumps to Record on Speculation Online Clothing Retailer May Be Bought

Asos Plc, the U.K.’s second-biggest online clothing retailer, rose to a record high in London trading on speculation that the company may be a bid target.

The shares gained as much as 71 pence, or 6.9 percent, to 1,104 pence, the highest since they were listed in 2001. That extended the two-day gain to about 12 percent and boosted Asos’s market value to about 815 million pounds ($1.25 billion).

“There’s speculation that Asos may be a bid target,” said Andy Wade, an analyst at Numis Securities in London. Amazon.com Inc., Marks & Spencer Group Plc and Tesco Plc are being tipped as potential suitors for the London-based company, he said.

Asos spokesman Jamie Ramsay declined to comment. Calls to Amazon outside of regular office hours were not immediately returned. Marks & Spencer spokesman Philip Sorensen declined to comment. Tesco spokesman Trevor Datson declined to comment.

“Our view is that it’s a very good strategic fit with something like Amazon, but less so with M&S and Tesco,” said Wade, who wrote in a note today that an approach from Amazon in the next 18 months would be “no surprise.” He doesn’t expect any takeover approaches in the “immediate future.” Wade has an “add” rating on the stock and a target price of 1,000 pence.

Asos, which sells clothing brands including Whistles and Karen Millen, said July 14 first-quarter sales jumped 48 percent to 65.8 million pounds, led by gains in countries outside the U.K. The company aims to generate 1 billion pounds in revenue in five years by targeting young female shoppers with new websites in the U.S., France and Germany.

Asos traded up 59 pence, or 5.7 percent, at 1,092 pence as of 2:35 p.m. in London.

To contact the reporter on this story: Clementine Fletcher in London cfletcher5@bloomberg.net.

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