Mike Ashley’s Frasers ups stake in Hugo Boss after takeover bid

Frasers Group has increased its stake in Hugo Boss to nearly 48% after offering €38 for every share not already owned by the firm. The English sports retailer, owner of Sports Direct, missed out on full control of the luxury fashion brand, as the board rejected its initial £1.7bn takeover offer. Approximately 12.16 million Hugo Boss shares were bought from investors, representing more than 17% of the company.

This makes Frasers the biggest shareholder in Hugo Boss, with a stake valued at over €1bn. The German fashion house's board had previously dismissed the Frasers bid as "inadequate," urging shareholders not to accept the offer. Analysts did not find Ashley's modest 4% premium compelling. Hugo Boss's shares surged above €38 immediately after Frasers presented its bid in June, making the offer attractive.

However, Frasers' strategy to secure more control over Hugo Boss aligns with its broader plan to strengthen its presence in the luxury sector. Earlier this week, Frasers acquired Harvey Nichols, a struggling department store, for £40m, aiming to integrate it with its luxury Flannels brand. Frasers' CEO, Michael Murray, acknowledged the need for significant changes in Harvey Nichols, even if it meant a smaller business in the short term.

The acquisition of Hugo Boss, which has faced challenges since Mike Ashley's initial bid, could be part of Frasers' broader strategy to tighten its grip on the luxury market.