Mike Ashley’s Frasers Group (FRAS) has taken its biggest step yet towards controlling Hugo Boss, launching a takeover offer that values the German fashion house at €1.98bn (£1.73bn) and puts years of speculation firmly into motion.
The FTSE 100 retailer, which owns Sports Direct, Flannels and Game, already holds just over 26% of Hugo Boss and is the company’s largest shareholder. It is now offering €38 per share for the stock it does not already own, representing a premium of around 4.3% to Wednesday’s closing price in Frankfurt, where Hugo Boss shares finished trading slightly above €36.
Frasers shares reacted positively to the announcement, climbing 4% to close at 771p on Wednesday. The stock has now gained roughly 15% since the start of the year as investors continue to back the group’s strategy of building positions in major consumer brands.
Rather than presenting the move as a shake-up, Frasers sought to portray the offer as a natural extension of an investment relationship that began in 2020.
Over the past five years the retailer has steadily increased its holding while becoming more closely involved in the company’s governance, with Frasers chief executive Michael Murray securing a seat on Hugo Boss’s supervisory board.
The company made clear it remains supportive of the current leadership team, including supervisory board chairman Stephan Sturm and chief executive Daniel Grieder.
“Hugo Boss is a key brand partner for Frasers, and one of the top five brands across the Frasers group,” the company said.
It added that it continues to support management’s strategy of delivering sustainable growth while strengthening the brand’s position in the premium fashion market.
The offer is notable less for the premium attached to it and more for what it represents. Frasers already has significant influence over Hugo Boss through its shareholding, yet ownership beyond a blocking minority stake would give the retailer far greater exposure to one of Europe’s best-known fashion labels.
If shareholders accept the proposal and regulators give approval, Frasers expects the transaction to complete during the second half of the year.
For Frasers, the move would mark another major expansion beyond its traditional sports retail roots. For Hugo Boss, it could signal the beginning of a new chapter under the influence of an investor that has spent years quietly building its presence behind the scenes.