Hugo Boss shares soar as Mike Ashley’s Frasers circles
Hugo Boss shares have jumped following a €2bn takeover approach from Frasers, sending its share price above the offer tabled by Mike Ashley’s group.
The German luxury brand said it is reviewing the “unsolicited” takeover attempt, which would offer €38 per share, totalling about €1.98bn and valuing the fashion house at €2.7bn.
But the takeover interest drove Frankfurt-listed Hugo Boss’ share price up more than nine per cent on Thursday to €39.98 – above the offer tabled by Frasers.
Meanwhile shares in FTSE 250-listed Frasers gained nearly two per cent on Thursday, to 784p, recovering from a two per cent drop in early trading.
The Sports Direct and House of Fraser owner proposed on Wednesday night to buy out the 74 per cent of Hugo Boss which it does not already own.
Mike Ashley’s firm said the German fashion house is currently “undervalued” and is a “key brand partner for Frasers, and one of the top five brands across the Frasers’ Group”.
It said it has already lined up financing for a takeover from BNP Paribas, Deutsche Bank, NatWest and Standard Chartered.
Hugo Boss responded to the offer on Wednesday evening, saying that it had “not been coordinated with the company”.
“Following publication of the offer document by Frasers Group plc, the managing board and the supervisory board will thoroughly examine the offer and issue a reasoned statement, acting in the best interests of the company, its shareholders, employees and customers,” it said.
Analysts at Panmure Liberum said on Thursday that the “modest” four per cent premium being offered by Frasers suggests it is “seeking optionality rather than necessarily full control”.
The stock broker raised its target price on Frasers but maintained a hold recommendation, saying: “We would need greater confidence that forecast momentum is stabilising before becoming more bullish.”
Russ Mould, AJ Bell’s investment director, said Frasers is seeking to use Hugo Boss to accelerate its move into more up-market fashion.
The German fashion house is “down but not out. Sales are in decline, but margins are improving, and it is picking up business from high-value shoppers trading down from expensive luxury brands,” he added.
Frasers Group, which is majority owned by billionaire Mike Ashley, has spent years trying to exert influence over Hugo Boss.
The fashion conglomerate installed chief executive Michael Murray on the supervisory board of Hugo Boss last year, and later warned that it would vote against any future dividend payments proposed by the firm.
Frasers and Ashley have garnered a reputation for taking large stakes in rival retailers, before using this position to make larger plays.
The group launched a takeover bid of luxury bagmaker Mulberry in 2024 but was slapped down by the firm’s owner, which reaffirmed its confidence in its turnaround plan.
Last year, Ashley failed in his bid to join the board of fast-fashion giant Boohoo, in which Frasers is the largest shareholder.