Sneaking a march

18 April 2007 By John Foley Follow @johnsfoley

The German sportswear group has a strong brand, and is undergeared. There’s also the chance to add value by sorting out Reebok. The deal is doable. There’s no big shareholder and no obvious trade buyer. If Apax can stakebuild, it can shut out private equity rivals.

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Apax is interested in buying a stake in Adidas, the German sportswear company, according to press reports. The private equity group is reportedly preparing a tender offer at E50 a share – an 11% premium to the closing price on Tuesday – in order to acquire a blocking minority of 25%. Apax declined to comment on the reports.

Adidas, whose enterprise value on Tuesday was E11.4bn, acquired US rival Reebok in 2005 for E3.1bn, but has since struggled to integrate the acquisition. Orders for Reebok products, an indicator of future sales, fell 14% in the last quarter, led by weakening demand in the US.

Mike Ashley, the UK entrepreneur and majority owner of retailer Sports Direct, announced in March that he had bought a 3.1% stake in Adidas, which he holds personally. Ashley has previously said he wants to build the world's biggest sports retailer.

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