After initial takeover bid failed, Frasers takes control of Hugo Boss
Hugo Boss will become a Frasers subsidiary / Photo: ZorroGabriel / Shutterstock.com
British retailer Frasers Group, whose holdings include sporting goods chain Sports Direct, has increased its stake in German apparel maker Hugo Boss to 50.08%, making it a subsidiary. Frasers, controlled by billionaire Mike Ashley, previously sought to buy the German fashion house outright, but Hugo Boss rejected its EUR2 billion offer, calling it “financially inadequate.”
Details
On Friday, Frasers bought another 198,666 Hugo Boss shares for approximately EUR7.6 million ($8.51 million), the company stated in a London Stock Exchange filing. The purchase increased its stake to around 34.5 million shares, or 50.08% of the company’s share capital. The British group previously held approximately 48%, Bloomberg notes.
Having crossed the 50% threshold, Frasers will consolidate Hugo Boss’ financial results, assets, and liabilities into its accounts. However, a Hugo Boss spokesperson said the increased stake would not significantly change Frasers’ influence over the company or its day-to-day operations, as Bloomberg reports.
In June, Frasers offered to buy Hugo Boss shares for EUR38 apiece, a 4% premium to their market price at the time. The German company recommended that shareholders reject the offer, arguing that it undervalued the business.
Context
Frasers has been building its stake in Hugo Boss since 2020. As Bloomberg notes, the British group is known for acquiring stakes in European retailers and then pushing for changes in how they operate. Its growing influence at Hugo Boss has raised concerns among some investors about the independence of the German company’s supervisory board.
In September, Hugo Boss supervisory board chair Stephan Sturm stepped down after Frasers repeatedly questioned its support for him. Frasers CEO Michael Murray, Ashley’s son-in-law, took over as chair of the German company’s supervisory board, Bloomberg notes.
Frasers has expanded its presence in premium and luxury goods in recent years. It acquired stakes in British brands Mulberry and Burberry and, in August, bought storied department store chain Harvey Nichols out of administration.
Murray said in September that he saw “significant untapped potential” in Hugo Boss and aimed to create “sustainable value for all shareholders and stakeholders.” Frasers declined to comment on its further plans for the German brand beyond its published statement.
Frasers shares closed 0.3% higher on Friday, while Hugo Boss fell 0.8%.
