Frasers Group has launched a £1.7bn acquisition bid to acquire the remaining shares in its key brand partner, Hugo Boss, with a cash offer of €38 per share.

Under the voluntary public takeover offer, the British group will acquire all of the non-par value registered shares in the German firm which it does not already hold, corresponding to approximately 73.94% of the share capital.

Frasers described Hugo Boss as one of its top five brands across the group, and while it is supportive of the German firm’s board, it believes that increasing its investment would create value for its shareholders.

The group said the acquisition would constitute a "significant transaction for the purposes of the UK listing rules" and is therefore notifiable of some rules.

However, under these rules, the acquisition of the remaining Hugo Boss shares is not subject to shareholder approval.

Following the announcement, shares in Frasers dropped in early trading, but have since increased by over 1.6% on its opening price.

Investment director at AJ Bell, Russ Mould, stated: "Frasers has form in snapping up bargains and Hugo Boss ticks the right boxes for a business trading on a cheap valuation and in need of salvation. However, Frasers typically does pre-pack deals to cherry pick assets when a business goes into administration. That method typically means it gets a bargain and isn’t on the hook for any unwanted extras.

"Hugo Boss is down but not out. Sales are in decline, but margins are improving, and it is picking up business from high-value shoppers trading down from expensive luxury brands. Frasers is increasingly going upmarket and obviously sees the potential to use Hugo Boss’ brands to accelerate this plan."

---