Shares of the German fashion label Hugo Boss soared approximately 7% on Thursday following an announcement by its largest shareholder, the UK's Frasers Group, of a plan to acquire the company in full for around 2 billion euros.
The Frasers Group, which currently holds about 26% of Hugo Boss, disclosed late Wednesday its intention to purchase all remaining shares at 38 euros per share in cash. The total offer values the deal at 19.78 billion euros, equivalent to 22.8 billion US dollars, representing a premium of roughly 4% over Hugo Boss's closing price on Wednesday.
Hugo Boss stated that the unsolicited offer was not initiated in consultation with the company and that its board will conduct a thorough and careful review of the proposal.
During early trading, Hugo Boss shares climbed 6.7%, while shares of Frasers Group declined by 2.1%.
Upon successful completion, Hugo Boss would be integrated into the Frasers Group portfolio of retail brands. The group's existing holdings include Sports Direct and House of Fraser, alongside stakes in brands such as ASOS, Debenhams, and Flannels.
The retail conglomerate, founded by British billionaire Mike Ashley, has been aggressively pursuing acquisitions in recent years. Shore Capital analyst David Hughes noted that the bid for Hugo Boss carries significant strategic weight, as the brand specializes in high-end suiting and fragrances and is actively pursuing a luxury positioning.
Hughes analyzed that Frasers Group has been consistently realigning its business towards higher-spending consumer segments. Acquiring Hugo Boss would allow for a deeper foray into the premium menswear market and potentially grant greater influence over product, distribution, and in-store presentation within the luxury sector, which highly values brand exclusivity and physical retail operations.
He added, "In our view, Frasers is acquiring a brand of high strategic value at an attractive valuation."
Frasers Group expressed its support for Hugo Boss's current sustainability strategy and stated its backing for the continued leadership of CEO Daniel Grieder and Supervisory Board Chairman Stefan Sturm.
Analysts at Citi pointed out in a Wednesday note that the modest premium of the offer could lower the cost for Frasers Group to increase its existing stake while also fueling market speculation about the potential for a higher competing bid. The analysts concluded, "There remains some modest upside for the share price in the near term."
Frasers Group indicated that the proposed acquisition is subject to regulatory approvals in various jurisdictions and is anticipated to complete in the second half of 2026.
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