LONDON — Frasers Group, the British retail company controlled by billionaire Mike Ashley, has launched a bid to take full control of Hugo Boss, the German fashion house behind the BOSS and HUGO brands.
Frasers, already Hugo Boss’s largest shareholder, announced Wednesday that it will offer €38 per share in cash for the approximately 74% of the company it does not already own, valuing the outstanding shares at roughly €2 billion ($2.3 billion).
Investors immediately responded positively. Hugo Boss shares surged following the announcement and traded above the offer price, signaling that many investors believe a higher bid could eventually emerge.
The proposal would value Hugo Boss at approximately €2.7 billion overall.
Frasers currently owns just over 26% of Hugo Boss and is offering only a modest premium of about 4% above the stock’s previous closing price of €36.44.
The transaction does not require Frasers to acquire a minimum number of shares, but it remains subject to regulatory approval. The company expects the acquisition process to conclude during the second half of 2026.
BNP Paribas and Deutsche Bank are serving as financial advisers to Frasers.
The market’s reaction suggested investors remain unconvinced the current offer will be the final one.
Instead of trading near the €38 offer price, Hugo Boss shares climbed as high as €40.52 during trading after the announcement. In takeover situations, a stock trading above the bid price often reflects expectations that the offer may be increased or that another bidder could emerge.
At the same time, shares of Frasers Group moved lower, indicating some concern among its own investors about the cost and risks of acquiring the fashion company outright.
Mike Ashley has built a reputation as one of Britain’s most aggressive retail dealmakers.
He transformed Sports Direct into what is now Frasers Group, a retail empire that includes House of Fraser, Flannels, Sports Direct, and significant investments in companies including ASOS, Debenhams, and Currys.
Ashley owns nearly 74% of Frasers Group. While he stepped away from the board in 2022, leadership passed to his son-in-law, Michael Murray, who now serves as chief executive.
Murray also sits on Hugo Boss’s supervisory board, although Frasers said he did not participate in discussions regarding the takeover proposal.
The move fits a familiar pattern.
Frasers first invested in Hugo Boss in 2020 and has steadily increased its position over the years as part of a broader strategy to expand its presence in the premium and luxury retail market.
Earlier this year, the company also acquired a 5.8% stake in Puma, making it one of the German sportswear company’s largest shareholders.
Hugo Boss appears to fit the profile of many companies Frasers has targeted in the past: a globally recognized brand facing operational and financial challenges.
The company’s shares remain roughly 50% below their 2023 highs, while management continues working through a turnaround strategy focused on store upgrades, streamlining product offerings, and expanding womenswear sales.
Although the company has reported some progress, both revenue and profit declined during the most recent quarter.
One notable aspect of Frasers’ proposal was its unexpectedly supportive tone toward Hugo Boss management.
In its announcement, Frasers said the acquisition would help support additional investment in the business and publicly expressed confidence in current Chief Executive Daniel Grieder and Supervisory Board Chairman Stephan Sturm.
The comments marked a significant change from late last year, when Frasers openly challenged Hugo Boss leadership and sought board changes. The company withdrew those efforts only one day before announcing the takeover proposal.
Hugo Boss described the offer as unsolicited and said its board would carefully evaluate the proposal before making a recommendation to shareholders.
Analysts remain divided on Frasers’ ultimate objective.
Citi described the offer as relatively modest and suggested the pricing may leave room for a future increase while discouraging competing bidders.
Jefferies questioned whether Frasers actually intends to acquire full control, suggesting the move could instead be designed to provide greater flexibility for future investments in the company.
Russ Mould, investment director at AJ Bell, noted that Ashley has historically built value by acquiring underperforming brands at attractive prices and attempting long-term turnarounds.
The next steps now rest with Hugo Boss shareholders, regulators, and Frasers itself.
If Hugo Boss shares continue trading above the offer price, Frasers may eventually face a choice: raise its bid or remain a major shareholder without pursuing full ownership.
Either way, one of Germany’s best-known fashion brands has become the center of a major takeover battle, with one of Britain’s most prominent retail investors leading the charge.
Business — JBizNews Desk
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