Takeover of Hugo Boss looms as Frasers stake passes 30% threshold
Frasers Group PLC on Tuesday said its ownership of Hugo Boss AG had passed the mandatory threshold under German takeover law.
The Shirebrook, England-based retailer is the owner of the House of Fraser, Sports Direct and Flannels brands. It acquired an additional 3.69% of Hugo Boss through the exercise of put options on Friday, taking its total stake to 30.28%.
This excludes additional Hugo Boss shares tendered into Frasers's bid to acquire the company, and bumps the British retailer's ownership above the 30% mandatory bid threshold specified in the German Takeover Code.
The offer will remain open to acceptances from Hugo Boss shareholders until July 27.
In June, Frasers offered EUR38.00 per share, or EUR1.93 billion in total, to acquire the remaining shares in Hugo Boss which it did not already own.
The Metzingen, Germany-based fashion company has urged its shareholders to reject the offer, though Frasers has said the price is "final", and that it expects the acquisition to close in the second half of this year.
Hugo Boss shares fell 0.2% to EUR37.96 at midday on Thursday in Frankfurt, giving it a market capitalisation of EUR2.62 billion. The stock is down 7.6% over the past year.
Frasers traded 0.7% higher at 757.00p for a market cap of £3.39 billion.
Hugo Boss last month argued that the bid from Frasers was "inadequate from a financial point of view".
"This conclusion is supported by two external opinions provided by Bank of America and Goldman Sachs. In particular, the offer price reflects neither the standalone value of Hugo Boss nor its medium- to long-term value creation potential. On this basis, the managing board and supervisory board recommend that shareholders do not accept the offer," Hugo Boss said.
The company expects to see improvements as a result of its "Claim 5 Touchdown" strategic plan in 2026, "despite the challenging market environment".
The overhaul comes as the brand battles a sharp decline in sales. For the three months ended March 31, Hugo Boss posted a 51% profit decline to EUR18 million from EUR37 million.
Alongside Hugo Boss, Frasers has built up stakes in brands such as Asos PLC, boohoo Group PLC, Puma SE and AO World PLC. It made a £166 million tilt to acquire all of Sydney-listed footwear retailer Accent Group Ltd in June.
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