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Hugo Boss AG on Thursday recommended its shareholders reject a takeover approach from Frasers Group PLC, on the grounds that it undervalues the company’s prospects. Last month, the Shirebrook, England-based owner of the House of Fraser, Sports Direct and Flannels brands offered €38.00 per share, or €1.93 billion in total, to acquire the remaining shares in Hugo Boss, of which Frasers already owns about 26%. Hugo Boss shares rose 0.2% to €37.86 on Thursday morning in Frankfurt, giving it a market capitalisation of €2.61 billion. The stock is down 9.9% over the past year. Frasers traded 0.1% higher at 731.50p for a market cap of £3.27 billion. The Metzingen, Germany-based fashion company on Thursday argued that the offer was ‘inadequate from a financial point of view’. ‘This conclusion is supported by two external opinions provided by Bank of America and Goldman Sachs. In particular, the offer price reflects neither the standalone value of Hugo Boss nor its medium- to long-term value creation potential. On this basis, the managing board and supervisory board recommend that shareholders do not accept the offer,’ Hugo Boss said. It noted that the offer reflects the statutory minimum, which is equal to the highest price Frasers paid for Hugo Boss shares in the six months before making the offer. It also reflects only ‘a marginal premium’ of 4.8% to the June 9 closing price of Hugo Boss shares, which was €36.26, the fashion company added. Further, Hugo Boss argued that the Frasers bid ‘does not envisage specific changes or measures affecting current business activities of Hugo Boss or its commercial and strategic objectives’. In its own view, Hugo Boss still has ‘substantial’ potential as a standalone company, targeting an earnings before interest and tax margin of 12% over the medium to long term, and average annual free cash flow of €300 million until 2028. The company expects to see improvements as a result of its ‘Claim 5 Touchdown’ strategic plan in 2026, ‘despite the challenging market environment’. The overhaul comes as the brand battles a sharp decline in sales. For the three months ended March 31, Hugo Boss posted a 51% drop in net income to €18 million from €37 million, while earnings before interest and tax dropped 42% to €35 million from €61 million. First-quarter sales declined 9.4% to €905 million from €999 million. Hugo Boss Chief Executive Daniel Grieder maintained the Frasers bid was insufficient, commenting on Thursday: ‘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, chair of the Hugo Boss supervisory board, added: ‘We look forward to maintaining a constructive relationship with Frasers Group as single largest shareholder of Hugo Boss.’ Late last month, Frasers stressed that its offer price was ‘final’. Earlier in the month, it had said it expected the takeover to close in the second half of this year. Alongside Hugo Boss, Frasers has built up stakes in brands such as Asos PLC, boohoo Group PLC, Puma SE and AO World PLC. It made a £166 million tilt to acquire all of Sydney-listed footwear retailer Accent Group Ltd last month. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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