Shares in adidas rose 6% in "early trading after a report said a group of investors was considering a bid for the company's Reebok brand," according to the BBC. Hong Kong's Jynwel Capital and investment funds in Abu Dhabi were "considering an offer" worth $2.2B. The news "provided a welcome boost for the German company's flagging share price, down about 40% this year." Adidas bought U.S.-based Reebok in '06, but has "struggled to boost sales." Warburg Research analyst Joerg Philipp Frey said the "reported offer looked like a good deal." Frey: "From the Adidas perspective, that would be a great price. Whether management would accept it is another matter as it would be an admission of defeat." The Reebok acquisition was designed to help adidas "challenge Nike on its home turf and raise the profile of the German company's own brand." But although the Reebok purchase was a "success initially, in the past few years its market share has shrunk." Reebok also "suffered after losing a contract" to supply the NFL. Adidas "has been subject to other speculation recently." Last month, German media reported that "hedge funds including
Knight Vinke, Third Point and TCI were considering buying stakes in
Adidas to force management to make sweeping changes, including the sale
of Reebok" (BBC, 10/20).