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Frasers Group has launched a takeover bid for German luxury fashion brand Hugo Boss, after steadily building up a significant stake in the company over the past six years.
Mike Ashley’s retail vehicle, which currently owns around 26% of Hugo Boss shares, said it was offering to pay around €1.98 billion (£1.73 billion) for the remainder of the business to take full control.
The offer would see Frasers pay €38 per share to shareholders of Hugo Boss. Shares were worth €36.44 at the close of trading on Wednesday.
The moves comes after speculation in recent years that Frasers could seek a takeover of the brand, having steadily built up its shareholding since first investing in Hugo Boss in 2020.
Michael Murray, CEO of Frasers Group
Frasers CEO Michael Murray is a member of Hugo Boss’s supervisory board as a result of the growing shareholding.
However Frasers stressed in a statement that Murray “did not participate in the board’s discussion of, or decision to make, the offer”. The offer is now expected to go to a shareholder vote.
The UK retail giant, which has a current market value of around £3.45 billion, said it would hope to complete the deal in the second half of this year if it is approved and receives regulatory approvals.
In a statement, Frasers said: “Hugo Boss is a key brand partner for Frasers, and one of the top five brands across the Frasers Group.
“Frasers is a long-term investor in Hugo Boss and remains supportive of both Stephan Sturm, the chair of the supervisory board, and Daniel Grieder, chief executive, in pursuit of their sustainable growth strategy whilst continuing to build brand equity.
“Frasers’ board of directors believes that increasing Frasers’ investment in Hugo Boss will create value for Frasers’ shareholders.”
Should the acquisition prove successful, it would lead to Hugo Boss becoming part of a retail empire that includes Frasers department stores, luxury chain Flannels, Jack Wills, USC and Savile Row tailor Gieves & Hawkes among others.