Frasers Group launches €2 billion takeover offer for struggling Hugo Boss
Frasers Group's Bid and Hugo Boss's Struggles
By Tristan Veyet and Helen Reid
June 10 (Reuters) - Frasers Group, the retailer controlled by British billionaire Mike Ashley, launched a €2 billion ($2.31 billion) takeover offer for struggling German fashion brand Hugo Boss on Wednesday.
Details of the Takeover Offer
Frasers, the biggest shareholder in Hugo Boss with a 26.06% stake, is offering €38 per share in cash for the remaining shares - a 4.3% premium to the €36.44 closing price of Hugo Boss stock on Wednesday.
Frasers Group's Expanding Retail Empire
Hugo Boss would be the latest addition to Ashley's sprawling retail empire, which includes Sports Direct and House of Fraser under Frasers Group, as well as stakes held by Frasers in Asos, Debenhams, and Currys.
Challenges Facing Hugo Boss
Hugo Boss has been struggling with falling sales and set out a new strategy six months ago to revamp stores, streamline its product range and offer more womenswear. Its shares are trading at around half their value three years ago.
Frasers Group's Statement
"To facilitate further investment by Frasers in Hugo Boss, Frasers has decided to make a voluntary public takeover offer to all Hugo Boss shareholders for all Hugo Boss shares not directly held by Frasers," Frasers said in a statement.
Response from Hugo Boss
Hugo Boss said late on Wednesday that Frasers did not coordinate the takeover approach with the company and that its board would review the offer, which values the remaining shares, representing 73.94% of the company, at about €1.98 billion.
Leadership and Advisory Details
Support for Hugo Boss Leadership
Frasers said it remains supportive of Hugo Boss CEO Daniel Grieder and Chairman Stephan Sturm - a reversal after saying in November that it no longer had confidence in the latter.
Frasers Group's Internal Governance
It said Frasers CEO Michael Murray, who also sits on the supervisory board of Hugo Boss, did not participate in the board's discussion or decision to make the offer.
Ashley, who holds 73.7% of Frasers Group, stepped down from the board in 2022, and handed the CEO role to Murray - his son-in-law.
Financial Advisers
BNP Paribas and Deutsche Bank were financial advisers to Frasers on the offer.
Additional Information
($1 = 0.8654 euros)
(Reporting by Tristan Veyet in Gdansk; Additional reporting by Mrinmay Dey in Mexico City; Editing by William Maclean, Emelia Sithole-Matarise, Jan Harvey and Sanjeev Miglani)
