Frasers Makes Offer to Acquire Remaining Hugo Boss Shares
Businessman Mike Ashley's retail group, Frasers, has submitted a takeover bid for the German fashion company Hugo Boss.
Frasers currently holds just over 25% of Hugo Boss, a stake it has gradually increased since 2020. On Wednesday, the group announced its intention to purchase the remaining shares for €1.98 billion (£1.73 billion).
Hugo Boss responded by stating it would "thoroughly examine the offer and issue a reasoned statement."
Formerly known as Sports Direct, Frasers owns several retail brands including House of Fraser, Game, Jack Wills, and Evans Cycles. It is also the largest shareholder in Boohoo, although the relationship between the two companies has been strained.
While Frasers is known for acquiring retail brands that have entered administration, its approach with Hugo Boss differs as it has steadily increased its ownership in a profitable company over several years.
Having expanded its shareholding significantly, Frasers is approaching the 30% ownership threshold mandated by German law to trigger a mandatory offer for the entire company.
The proposed deal values Hugo Boss at €38 per share, which is above the €36.5 closing price on Wednesday.
Frasers anticipates completing the takeover by the end of the year, subject to regulatory approvals.
Hugo Boss described the offer as "unsolicited" and noted it had "not been coordinated with the company," adding that it would "inform its shareholders and the public about further developments and next steps."
Frasers highlighted its "strong track record in making strategic investments," describing itself as a "long-term investor" in Hugo Boss and affirming its continued support for the company's chair and chief executive.
Boohoo and Debenhams Relations
The relationship between Frasers and Boohoo has been less amicable, particularly regarding the Debenhams brand, which is still formally registered as Boohoo.
Boohoo acquired the Debenhams brand after it entered administration, a move Frasers opted not to pursue.
Last year, Boohoo attempted to officially rename itself as Debenhams, but Frasers used its voting power as a shareholder to block the name change.
Dan Finley, Boohoo's chief executive, told the BBC earlier this week:
"It's just the formal change to the name that's listed at Companies House... required a special resolution that didn't pass."
He added,
"I did not know why Frasers blocked the change."
Since investing in Boohoo in 2023, Frasers has issued several open letters criticizing the company and its co-founder Mahmud Kamani, frequently expressing its discontent in the media.
Mike Ashley's Business Background
Mike Ashley, a prominent and sometimes controversial figure in British business, founded Frasers when it was known as Sports Direct. He remains the largest shareholder of the retail group, with his son-in-law serving as chief executive.
Ashley has previously referred to dissatisfied investors as "cry babies," faced scrutiny over working conditions in Sports Direct factories, and was reported to have vomited into a fireplace after consuming 12 pints during a business meeting at a pub.
He also owned Newcastle United football club for 14 years, a period marked by fan dissatisfaction due to his management decisions and the temporary renaming of St James' Park as Sports Direct Arena.
