Hugo Boss shareholders have largely rejected Frasers Group’s £1.7bn takeover offer, despite the company tightening its grip on the German fashion brand.
Just 7.3 per cent of Hugo Boss shares were tendered during the initial acceptance period, which closed on Monday 27 July.
Frasers received acceptances covering 5.04m shares, taking its total holding and accepted shares to 37.58 per cent of Hugo Boss’ share capital and voting rights.
The retail group directly owned a 30.28 per cent stake before the acceptances were added.
Frasers, which is controlled by Mike Ashley, has offered €38 in cash for each Hugo Boss share it does not already own. The offer values the remaining stake at around €1.93bn (£1.7bn) and the whole business at approximately €2.7bn (£2.3bn).
Frasers extends Hugo Boss offer
The Sports Direct and Flannels owner opened an additional acceptance period, giving Hugo Boss investors until 13 August to sell their shares under the same terms.
Frasers has said the €38-a-share offer is final and will not be increased.
The bid became unconditional earlier this week after receiving merger clearance from the European Commission, which represented the final regulatory condition attached to the deal.
However, the Hugo Boss management and supervisory boards have unanimously urged shareholders to reject the approach, describing the price as financially “inadequate”.
The fashion group said the offer failed to reflect its standalone value or its medium-to-long-term growth prospects.
Frasers chief executive Michael Murray, who is Ashley’s son-in-law, already sits on the Hugo Boss supervisory board but was excluded from its assessment of the offer because of the potential conflict of interest.
Frasers is reportedly considering installing Murray as Hugo Boss chief executive should it ultimately secure control of the business.
A takeover would mark Frasers’ largest acquisition to date and significantly expand its presence in the international premium fashion market.
The group has pursued an aggressive expansion strategy under Murray, building stakes in retailers and brands including Asos, Mulberry, Puma and Burberry, alongside separate takeover efforts targeting Australian footwear retailer Accent Group.
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