Bosses at Hugo Boss have urged investors to reject an “inadequate” takeover offer from Mike Ashley’s Frasers Group.
The retail giant behind Sports Direct and House of Fraser currently owns around 26% of Hugo Boss but launched a move to take full control last month.
It offered to pay around 1.98 billion euro (£1.73 billion) for the remainder of the business, which would see it pay 38 euro per share to shareholders.
Shares in the group were worth 36.44 euro at the close of trading prior to the approach.
But on Thursday, Hugo Boss’s management and supervisory board said they “unanimously recommend that shareholders do not accept” the offer.
The German fashion firm concluded that deal would be “inadequate from a financial point of view”.
Daniel Grieder, chief executive officer of Hugo Boss, said: “Hugo Boss has a well-defined strategy, a strong financial profile, and a compelling path to superior long-term value creation.
“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.”
The offer is expected to go to a shareholder vote.
It comes after speculation in recent years that Frasers could seek a takeover of the brand, having steadily built up its stake since first investing in Hugo Boss in 2020.
Frasers’ chief executive Michael Murray is a member of Hugo Boss’s supervisory board as a result.
The UK retail giant, which has a current market value of around £3.3 billion, previously said it would hope to complete the deal in the second half of this year if it is approved and receives regulatory approvals.
Frasers has adopted a strategy of building stakes in rival retailers in recent years, owning significant chunks of brands including Asos, Boohoo Group, Puma and AO World.
