MAIDENHEAD — Frasers Group launched a takeover offer for German fashion brand Hugo Boss, valued at approximately €1.98 billion (£1.73 billion). The offer involves €38 per share in cash for the remaining shares of the company.
Frasers currently owns a 26% stake in Hugo Boss. The offer price represents a premium of about 4.3% compared to Hugo Boss's closing share price of €36.44 on Wednesday. Following the announcement, Hugo Boss shares increased by approximately 6.5% during early trading on Thursday.
Hugo Boss stated the approach was not coordinated and said: "The managing board and the supervisory board will thoroughly examine the offer and issue a reasoned statement, acting in the best interests of the company, its shareholders, employees and customers."
Frasers said: "Hugo Boss is a key brand partner for Frasers, and one of the top five brands across the Frasers Group. Frasers is a long-term investor in Hugo Boss and remains supportive of both Stephan Sturm, the chair of the supervisory board, and Daniel Grieder, chief executive, in pursuit of their sustainable growth strategy while continuing to build brand equity. Frasers' board of directors believes that increasing Frasers' investment in Hugo Boss will create value for Frasers' shareholders."
Frasers owns several retail chains, including Sports Direct, Frasers department stores, Flannels, and Evans Cycles. It also owns the Savile Row tailor Gieves & Hawkes and holds equity positions in companies such as Asos, Debenhams, and Currys. The company has a market capitalization of approximately £3.45 billion.
David Hughes, consumer analyst at Shore Capital, said: "Frasers has spent several years repositioning parts of the estate upmarket, with Flannels central to its aspiration to become a more credible destination in premium fashion. Full ownership, or at least effective control, of Hugo Boss would deepen Frasers' access to a globally recognised premium menswear and lifestyle brand, strengthen brand partnerships across the group and potentially give it greater influence over product, distribution and presentation in a channel where brand scarcity and execution matter."
Michael Murray is chief executive of Frasers. He assumed day-to-day management from Mike Ashley in 2022. Murray also serves as a member of Hugo Boss's supervisory board, but he did not participate in the Frasers board discussion regarding the takeover offer. Mike Ashley retains a 73% ownership stake in Frasers. Ashley opened his first sports store in Maidenhead, Berkshire, in 1982 with £10,000 from his parents. His net worth reached £3.44 billion last year, according to wealth rankings.
Hugo Boss, founded in 1924, is traded on the Frankfurt stock exchange. The company generated €4.3 billion in sales during the previous fiscal year. The takeover offer values the total business of Hugo Boss at approximately €2.7 billion.
No independent assessment was available for this report.