Hugo Boss asked its shareholders to reject a $2.2 billion takeover bid from Frasers Group, the parent of Sports Direct, claiming it was “financially inadequate.”
Last month, Frasers, led by Mike Ashley, said it intended to acquire the 73.42 percent stake in Hugo Boss that it does not own for roughly €1.93 billion ($2.2 billion), or €38 a share.
The maker of premium apparel said the €38-per-share cash offer, just 4.3 percent of the share price when it was announced, reflected the legally required minimum price for Frasers to raise its stake rather than Hugo Boss’ intrinsic value or potential. It recommended on Thursday, July 9, that shareholders do not accept the offer, citing opinions from Bank of America and Goldman Sachs.
Last month, Frasers, led by Mike Ashley, said it intended to acquire the 73.42 percent stake in Hugo Boss that it does not already own for around €1.93 billion ($2.2 billion), or €38 a share.
Hugo Boss said it remains focused on its “Claim 5 Touchdown” strategy, which it announced last year, and is designed to drive sustainable, profitable growth through 2028.
“Hugo Boss has a well-defined strategy, a strong financial profile, and a compelling path to superior long-term value creation,” said Daniel Grieder, CEO of Hugo Boss. “With Claim 5 Touchdown, we focus on further strengthening our brands, structurally improving profitability, and accelerating cash generation over the coming years. Against this backdrop, we firmly believe that the offer price fails to capture the company’s intrinsic value and long-term potential. We are fully committed to creating significant value for all shareholders in the years to come.”
Stephan Sturm, chairman of the Supervisory Board of Hugo Boss, said, “Hugo Boss is a strong company with a focused strategic agenda and a highly experienced management team. Following a comprehensive and independent review, we have concluded that the offer price is financially inadequate and fails to appropriately reflect Hugo Boss’ value and future potential. We are convinced that the continued execution of Claim 5 Touchdown offers superior value creation for all shareholders. At the same time, we look forward to maintaining a constructive relationship with Frasers Group as the single largest shareholder of Hugo Boss.”
Frasers’ retail banners include Sports Direct, House of Fraser, The Webster, Game, Jack Wills, Evans Cycles, USC, Gieves & Hawkes, and Sofa.com. Fraser’s brand portfolio includes Everlast, Slazenger, Karrimor, Lonsdale, No Fear, LA Gear, Donnay, and Antigua.
Image courtesy Hugo Boss
