Key facts
- Hugo Boss's board unanimously recommended rejecting Frasers Group's £1.7bn takeover bid.
- The offer of €38 per share was deemed "inadequate" by Hugo Boss.
- Hugo Boss consulted with Bank of America and Goldman Sachs.
- Frasers Group, which owns 26% of Hugo Boss, seeks full control.
- Hugo Boss is implementing a strategic overhaul expecting mid to high single-digit sales decline this year.
- Hugo Boss sales fell 6% to €905m in the first quarter.
Hugo Boss has formally urged its shareholders to reject a £1.7bn takeover bid from Mike Ashley's Frasers Group, deeming the offer "inadequate" and not reflective of the company's value. Frasers Group, which already holds a 26% stake in the German fashion house, launched its bid last month with an offer of €38 per share.
In a statement on Thursday, Hugo Boss's management and supervisory boards announced their unanimous recommendation against accepting the offer, following a comprehensive review process. The company, advised by Bank of America and Goldman Sachs, concluded that the bid neither reflects Hugo Boss's standalone value nor its medium to long-term potential for value creation. Analysts noted the modest 4% premium offered by Frasers, suggesting the group might not be seeking outright control.
Hugo Boss is currently implementing a strategic overhaul aimed at achieving sustainable, profitable growth, which is expected to result in a mid to high single-digit decline in currency-adjusted sales this year before returning to growth in 2025. First-quarter sales fell 6% year-on-year to €905m, though full-year earnings targets remain between €300m and €350m. The company maintains its ambition to become a leading premium, tech-driven, customer-centric global fashion platform.
Frasers Group's pursuit of Hugo Boss is part of its broader strategy to expand into high-end fashion. The group has previously installed its chief executive, Michael Murray, on Hugo Boss's supervisory board and has a history of acquiring significant stakes in rival retailers. Frasers' previous takeover attempt of Mulberry was unsuccessful, and Ashley also failed in his bid to join the board of Boohoo, where Frasers is the largest shareholder.