Frasers Group has launched a near £1.7bn takeover offer for Hugo Boss as Mike Ashley’s retail empire looks to take full control of the German fashion brand.
The Sports Direct owner, which is already Hugo Boss’s biggest shareholder with a 26.06 per cent stake, has offered €38 per share in cash for the remaining shares in the business.
The offer represents a 4.3 per cent premium to Hugo Boss’s closing share price of €36.44 on Wednesday and values the remaining 73.94 per cent of the company at around €1.98bn.
Frasers said the move would allow it to deepen its investment in Hugo Boss, which it described as one of its top five brand partners.
The retailer said: “To facilitate further investment by Frasers in Hugo Boss, Frasers has decided to make a voluntary public takeover offer to all Hugo Boss shareholders for all Hugo Boss shares not directly held by Frasers.”
Hugo Boss said the takeover approach had not been coordinated with the company and that its board would review the offer.
Hugo Boss has been under pressure after a difficult trading period, with falling sales and a share price that has roughly halved over the past three years.
The business set out a new turnaround strategy six months ago, focused on revamping stores, simplifying its product range and growing its womenswear offer.
Frasers has steadily built its position in Hugo Boss since first investing in the business in 2020, fuelling long-running speculation that Ashley’s group could eventually seek to take over the company.
A successful deal would bring Hugo Boss into a retail group that already includes Sports Direct, Flannels, House of Fraser, Evans Cycles and Jack Wills, alongside stakes in a string of other listed retail businesses including Asos, Debenhams and Currys.
Frasers said it remained supportive of Hugo Boss chief executive Daniel Grieder and supervisory board chairman Stephan Sturm, despite previously saying in November that it no longer had confidence in Sturm.
Frasers chief executive Michael Murray, who is Ashley’s son-in-law, sits on Hugo Boss’s supervisory board. The group said Murray did not take part in the board’s discussion or decision to make the takeover offer.
Ashley stepped down from Frasers’ board in 2022 after handing the chief executive role to Murray, but remains the dominant shareholder in the business with a stake of around 73 per cent.
Frasers said it expects the deal to complete in the second half of the year, subject to shareholder backing and regulatory approval.
BNP Paribas and Deutsche Bank are acting as financial advisers to Frasers on the offer.
Click here to sign up to Retail Gazette‘s free daily email newsletter
