BERLIN (Reuters) — Shares in German sportswear firm Adidas AG jumped on Monday after the Wall Street Journal reported that an investor group that includes Jynwel Capital and funds affiliated with the Abu Dhabi government planned a $2.2 billion bid to buy Reebok.
Jynwel Capital, a Hong Kong-based private equity investment and advisory firm run by Jho Low, and the Abu Dhabi government-affiliated funds planned to make the offer imminently in a letter to Adidas directors, the Journal reported, citing unnamed sources close to the matter.
Adidas declined to comment.
Adidas, the world’s second largest sports apparel firm behind Nike, bought the U.S.-headquartered Reebok in August 2005 for $3.8 billion. It enjoyed initial success with a range of toning shoes, but has since struggled.
Adidas shares, which are down 41 percent this year after a series of profit warnings, traded up 5.6 percent by 8:15 a.m. CET.
The Reebok deal initially doubled Adidas’ U.S. sales, and taking over Reebok’s basketball and baseball contracts gave the German company more exposure in the key market.
But the brand then lost a contract to supply the U.S. National Football League and was hit by a lockout at the National Hockey League.
Adidas has steadily lost ground in North America in recent years, slipping to a market share of 5.6 percent in 2013, while Nike has advanced to 19.9 percent.
However, Adidas has made some progress in recent years by promoting Reebok as a fitness brand with a range of sponsorship deals and shoe launches, recording its fifth quarter of growth in the second three months of 2013 with a currency-neutral rise of 9 percent to 355 million euros ($453 million).
“We believe it would be a surprise if the management team that has continually backed the acquisition would want to sell,” Barclays analysts Julian Easthope, Helen Brand and Laura Levy wrote in a research note. “However, what it does show is the parts have value and that Adidas management will be under pressure to extract value from the group — in addition to the recently announced share buy back.”
Earlier this month, Adidas announced plans to return as much as 1.5 billion euros to shareholders over the next three years.