(Reuters) -British sportswear and fashion group Frasers on Wednesday said that, according to preliminary results, it now controls over 92% of share capital in the struggling Norwegian sporting goods retailer XXL.

WHY IT'S IMPORTANT

Frasers Group, majority owned by billionaire Mike Ashley, has been expanding its global retail investments, raising its stake in fashion retailer ASOS and closing deals in Australia, New Zealand, Africa, Gulf and Egypt. However, in Norway it faced resistance from XXL's board of directors.

CONTEXT

The UK-based company first made a bid for XXL in December but dropped it two months later, saying it could not secure acceptances from other large shareholders.

XXL's board of directors recommended shareholders rejected Frasers' second bid made in March, saying it did not offer a sufficient premium.

However, on May 27, XXL's largest shareholder Altor Invest decided to sell all its shares to Frasers.

Since 2019, XXL has been struggling with declining sales and liquidity constraints amid a weaker market, and began downsizing its retail network.

KEY QUOTES

"Frasers is acquiring a business which is in significant distress. As such, all stakeholders, including but not limited to, brand partners, landlords, suppliers and partners, will need to work collaboratively with Frasers in its efforts to save the XXL business in its current form," Frasers said in a statement.

The British retailer warned, however, that given limited information it had at the moment "there is no guarantee that XXL can be saved in its current form or at all."

WHAT'S NEXT

Frasers is set to buy the remaining XXL shares, based on the March offer document. No plans for XXL's delisting have been proposed yet, but this could change pending approval from a general meeting.

(Reporting by Vera DvorakovaEditing by Tomasz Janowski)