Frasers Group, the parent company of Sports Direct, has launched a massive £1.73 billion takeover bid for the popular German fashion brand Hugo Boss.
Details of the Offer
Frasers Group, which also owns House of Fraser, Game, Jack Wills, Evans Cycles, and is the largest shareholder in Boohoo, has offered 38 euros per share for the Hugo Boss stock it does not already own. This values the shares at €1.98 billion (£1.73 billion), according to Sky News.
Hugo Boss shares were trading at slightly over €36 in Frankfurt before the announcement. The UK-based company already holds a stake of just over 26 percent in Hugo Boss. If the deal is approved and receives regulatory clearance, it is expected to be finalized in the latter half of the year.
Market Reaction
Hugo Boss shares surged nearly 10 percent on Thursday morning to €39.90, indicating that investors anticipate a higher offer from Frasers or a potential rival bidder. The offer represents a modest premium of 4.3 percent compared to the previous Wednesday’s closing share price.
Hugo Boss Response
Hugo Boss stated that it is currently assessing the offer. The brand acknowledged Frasers as a key partner and long-term investor.
Frasers Group Statement
In a statement, 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 Officer, in pursuit of their sustainable growth strategy whilst continuing to build brand equity. Frasers' board of directors believes that increasing Frasers' investment in Hugo Boss will create value for Frasers' shareholders."
The deal highlights Frasers Group's aggressive expansion strategy in the luxury fashion market, building on its existing portfolio of retail and apparel brands.
