Hugo Boss urged shareholders to reject a €2 billion takeover bid
The Hugo Boss Board of Directors has urged shareholders to reject Frasers Group's €2 billion takeover bid / Photo: Shutterstock.com / salarko
Luxury retailer Hugo Boss has advised its shareholders to reject the takeover offer from the British Frasers Group at €38 per share. The German company believes that these terms do not reflect its fair value and long-term potential.
Details
On July 9, Hugo Boss’s Board of Directors and Supervisory Board unanimously recommended that shareholders reject the offer from British retailer Frasers Group, citing independent reports from Bank of America and Goldman Sachs. The German fashion brand explains that the proposed price does not reflect the value of the business or its potential for value creation in the medium and long term.
The June offer from Frasers, which is already Hugo Boss’s largest shareholder, calls for the purchase of the remaining 73.42% of the shares for approximately €1.93 billion. As Reuters notes, the price of €38 per share is only the minimum level required by German law for such transactions. At the close of trading on July 9, Hugo Boss shares were trading at €37.8, implying a premium of just 0.5%. At the time the offer was made, the premium stood at 4%.
Stefan Sturm, Chairman of the Hugo Boss Supervisory Board, stated that implementing the current strategy would provide shareholders with a higher return than the proposed deal. Last year, the company unveiled a new development plan through 2028, aiming to accelerate business growth amid challenging conditions in the luxury goods market. Frasers’ actions appear to be primarily aimed at raising its stake above 30 percent, rather than at implementing specific operational or strategic changes at the company, according to the German manufacturer’s board of directors.
What about the stocks?
On July 9, Hugo Boss’s stock price remained virtually unchanged. However, on the day Frasers announced its offer, the German company’s stock price jumped 6%. Since the beginning of the year, its stock price has risen 4.6%. By comparison, the German DAX index gained only 2.3% over the same period.
This article was AI-translated and verified by a human editor
