A fascinating story hit the wires today after a run up on Adidas stock led to talk that golf equipment giant Nike might make a play for it.
According to Reuters:
About 3.2 million shares had traded by 1056 GMT, higher than the stock’s 90-day average trading volume of 2.37 million. Adidas shares were up 1.6 percent at 38.47 euros by 1104 GMT having earlier climbed to 39.13 euros.
“There are rumors in the market that Nike (NKE.N: Quote, Profile, Research) was bidding for Adidas,” one trader said.
Some analysts said the rumor was unfounded, adding that it makes no sense for Nike to buy Adidas.
“If you look at the financial power of Nike, it would be possible for them (to buy Adidas)”, said Tim Burkhardt, an analyst at LBBW. “But I am not convinced that it is really an option or that Nike is really interested in Adidas.”
Another analyst said buying Adidas “would be a regulatory nightmare for Nike”.
He added: “There are always these rumors in the market. Sometimes Nike is buying Puma (PUMG.DE: Quote, Profile, Research), sometime Adidas.”
Adidas declined to comment.
Nike could not be reached for comment.
To be frank, it wouldn’t make sense why Nike would attempt a takeover of Adidas, which also owns the TaylorMade golf brand. Besides, the story is probably right — this would have a tough time of gaining competitive approval.