Adidas Shares Soar On Rumors Loeb, Other Activists Taking Position

Adidas Shares Soar On Rumors Loeb, Other Activists Taking Position

Adidas AG (ETR:ADS) (OTCMKTS:ADDYY) shares are soaring today, both in Frankfurt and New York, on news that several activist hedge funds, including Dan Loeb’s Third Point, were taking positions in the popular shoe maker.

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The new investors, also including The Children’s Investment Fund Management UK LLP and Knight Vinke Asset Management LLC, are looking for major changes at Adidas, including a possible spin-off of the company’s Reebok and TaylorMade units, according to a report from Germany’s Manager Magazin. The article also suggested that the activists were looking to push out Adidas CEO Herbert Hainer.

According to a knowledgeable source that spoke to Bloomberg, hedge fund Knight Vinke isn’t involved in discussions regarding acquiring a stake in Adidas. Activist funds Third Point and TCI didn’t respond to e-mails seeking comment by press time.

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Problems at Adidas

The stock price of the German shoe ad sports apparel company has fallen 37% this year through yesterday. Earlier this summer, Adidas AG (ETR:ADS) (OTCMKTS:ADDYY) negated its profit profit for the year and also abandoned sales and profit targets for next year.

Analysts say the sporting-goods titan, which sponsored both finalists at the soccer World Cup a few months ago, including champion Germany, is having to deal with much tougher competition from Nike Inc. and smaller rival Under Armour Inc., as well as a steadily slipping market for golf equipment and apparel.

Statement from Adidas

Adidas “continues to have an open constructive dialog with investors,” spokeswoman Katja Schreiber noted Thursday relating to a question about activist investors taking a stake in the company.

Adidas AG (ETR:ADS) (OTCMKTS:ADDYY) shares are up $.50 in early trading today, standing at $39.72 as of 9:45 AM ET Thursday.

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