(Aug 18): Frasers Group Plc increased its stake in Hugo Boss AG to nearly 48%, falling short of taking full control of the German fashion house after only 17.6% of investors accepted its takeover offer.
The owner of Sports Direct made a cash bid of €38 (US$43.96) a share, but the German label known for premium-priced suits and underwear told shareholders to reject the offer as it did not reflect the company’s value and potential.
Controlled by British billionaire Mike Ashley, Frasers has taken an activist role since first investing in Hugo Boss, pushing for change at a company hit by persistent weakness in womenswear and soft demand in China.
Hugo Boss had told shareholders that the offer, which reflected only a 4% premium to the undisturbed share price, indicated it was not a genuine takeover attempt but one aimed at lifting Frasers’ holding.
Under chief executive officer Daniel Grieder, Hugo Boss is in the midst of a reset designed to improve financial performance by closing some stores and streamlining product assortments, his second turnaround effort since taking over in 2021.
The company’s second-quarter results didn’t signal a sustained strategic reset, making Frasers’ bid more compelling, according to Bloomberg Intelligence.
While about 7% of Hugo Boss shareholders accepted Frasers’ bid during the initial acceptance period, take up was slow and Frasers extended the window for investors to sell their shares to Aug. 13.
Frasers has long sold Hugo Boss products in its stores and online. Last year, CEO Michael Murray, Ashley’s son-in-law, joined Boss’s supervisory board.
Hugo Boss said Murray didn’t participate in any review or decision-making process relating to the offer to avoid potential conflicts of interest.
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