Key facts
- Frasers Group has increased its stake in Hugo Boss to 30.28%.
- This stake increase triggers mandatory takeover bid rules under German law.
- Frasers' bid values Hugo Boss at nearly €2bn, or €38 per share.
- Hugo Boss's management and supervisory board have unanimously recommended shareholders reject the offer.
- Frasers Group reported an 8% revenue increase to £5.3bn and pre-tax profit growth to £528m.
Frasers Group, owned by Mike Ashley, has increased its shareholding in Hugo Boss to 30.28%, crossing the mandatory bid threshold under German takeover rules and intensifying pressure on the fashion house to accept its £1.7bn offer.
The retail group, which owns brands like Sports Direct and Flannels, announced Tuesday that it had acquired 2.5 million new shares in Hugo Boss. This move compels Frasers to make a formal offer for the entire company, a bid that currently stands at €38 per share, valuing the German fashion brand at nearly €2bn.
Frasers stated that its existing bid remains open for shareholders to accept. However, Hugo Boss's management and supervisory boards have unanimously recommended that shareholders reject the offer, deeming it financially inadequate. The fashion house consulted with bankers from Bank of America and Goldman Sachs, concluding that the bid does not reflect Hugo Boss's standalone or long-term value creation potential.
The offer is set to expire on Monday, July 27. Frasers Group, which previously held approximately 26% of Hugo Boss shares before launching its bid last month, reported that its investments in Hugo Boss and Australian firm Accent contributed £50m to its adjusted profit in the past year. The FTSE 250 company also reported an 8% increase in revenue to £5.3bn and a more than one-third rise in pre-tax profit to £528m for the year ending April.