Hugo Boss shares jump as it says it will ‘thoroughly examine’ Frasers offer

Shares in Hugo Boss jumped nearly 7% on Thursday after it said it would “thoroughly examine” a near-€2bn takeover offer from Sports Direct owner Frasers Group.

Mike Ashley’s fashion and sportswear group has pounced on the German fashion house, of which it already owns just over 26%, saying late on Wednesdaythat it was offering to pay about €1.98bn (£1.73bn) to take full control of the rest of the business.

That equates to €38 a share in cash – a 4.3% premium to Wednesday’s close. Shares in Hugo Boss rose as high as €39 at one point on Thursday, before easing back to settle at €38.84, up 6.5%. Frasers shares fell 2.5% in early trading.

Frasers has been steadily building its stake since 2020 in Hugo Boss, Germany’s biggest luxury fashion group with €4.3bn in sales last year.

That has prompted years of speculation that it could seek a takeover of the German brand as part of a wider push to move more upmarket.

Hugo Boss said late on Wednesday that the approach was not coordinated with the company and that its board would review the offer, which values the German brand at €2.7bn.

It said: “The managing board and the supervisory board will thoroughly examine the offer and issue a reasoned statement, acting in the best interests of the company, its shareholders, employees and customers.”

The deal would bring Hugo Boss into the retail empire controlled by the billionaire Ashley, whose Frasers Group owns Sports Direct, House of Fraser, the Flannels designer clothing chain and the Savile Row tailor Gieves & Hawkes. It also has shareholdings in other British retailers such as Asos, Debenhams and Currys.

JP Morgan Chase said the bid would set a near-term floor for the shares but flagged limited scope for further share price rises, adding it did not expect a rival bidder to emerge.

Hugo Boss, whose shares are about half of what they were worth three years ago, has been struggling with weaker sales since the post-pandemic boom. It has embarked on a turnaround strategy including store revamps, a streamlined product range and the expansion of women’s wear.

Last year, Michael Murray, the Frasers chief executive and Ashley’s son-in-law, joined Hugo Boss’s supervisory board.

David Hughes, a consumer analyst at Shore Capital, said: “Frasers has spent several years repositioning parts of the estate upmarket, with Flannels central to its aspiration to become a more credible destination in premium fashion.