Hugo Boss shares jumped 7% after a takeover bid. Is it worth buying them?

Shares of German fashion house Hugo Boss jumped about 7% in trading in Frankfurt on Thursday, June 11. The day before, the luxury company's largest shareholder, British retailer Frasers Group, offered to buy it outright.

Frasers owns 26% of Hugo Boss and now wants to acquire the remaining shares for a total of €1.978 billion. This price represents a premium of about 4% to Wednesday's closing level. The retailer expects to close the deal in the second half of the year after obtaining the necessary regulatory approvals. Hugo Boss said the offer had not been agreed with the company and added that it would "carefully review" it.

As Citigroup analysts noted, a relatively small premium to the market price may limit the purchase of shares by other investors, but at the same time it fuels expectations that a more favorable offer may appear later. According to Citi, this creates the potential for moderate growth of quotations in the short term, CNBC reports.

Wall Street is cautious about the pespectives of the company, which is trying to recover from a downturn in demand in China and address problems in its women's apparel segment. 11 out of 14 analysts who track Hugo Boss advise neither selling them nor building share, MarketWatch data shows. The fashion house has just two buy recommendations, and one analyst suggests getting rid of these securities.

This article was AI-translated and verified by a human editor