Hugo Boss has urged its shareholders to reject a takeover offer from Frasers Group, the retail giant controlled by Mike Ashley, describing the bid as 'inadequate from a financial point of view'.
Offer Details and Board Response
Frasers Group, which owns Sports Direct and House of Fraser, currently holds approximately 26% of Hugo Boss. Last month, it launched a move to take full control, offering around €1.98 billion (£1.73 billion) for the remaining shares, at €38 per share. Prior to the approach, Hugo Boss shares were trading at €36.44.
On Thursday, Hugo Boss's management and supervisory board issued a statement saying they 'unanimously recommend that shareholders do not accept' the offer. The German fashion firm concluded the deal would be financially inadequate.
CEO's Statement on Value
Daniel Grieder, chief executive officer of Hugo Boss, said: 'Hugo Boss has a well-defined strategy, a strong financial profile, and a compelling path to superior long-term value creation. We focus on further strengthening our brands, structurally improving profitability, and accelerating cash generation over the coming years. Against this backdrop, we firmly believe that the offer price fails to capture the company's intrinsic value and long-term potential.'
Background and Frasers' Strategy
The offer is expected to go to a shareholder vote. Frasers has steadily built its stake in Hugo Boss since first investing in 2020, and speculation about a full takeover has persisted. Frasers' chief executive Michael Murray sits on Hugo Boss's supervisory board as a result of the stake.
Frasers Group, with a market value of around £3.3 billion, previously stated it hoped to complete the deal in the second half of this year if approved and subject to regulatory clearances. In recent years, Frasers has adopted a strategy of acquiring stakes in rival retailers, including significant holdings in Asos, Boohoo Group, Puma, and AO World.
