Hugo Boss has urged shareholders to reject Frasers Group’s €2.7 billion takeover offer that it said significantly undervalues the company, frustrating billionaire Mike Ashley’s attempt to expand his influence over the German fashion group.The company’s management and supervisory boards said on Thursday that the British retail group’s voluntary cash offer last month of €38 a share was “inadequate from a financial point of view”.The rejection marks the latest development in Ashley’s attempt to deepen Frasers’ influence over Hugo Boss. The UK retail group, which owns about 26 per cent of the German company and is its largest shareholder, launched the offer in June after approaching the 30 per cent ownership threshold that, under German takeover rules, requires a bidder to make an offer for all remaining shares.Hugo Boss said the €38 a share offer reflected only the statutory minimum price required under German law, based on the highest price Frasers had paid for its shares during the previous six months. The company’s shares were trading at €37.86 on Thursday morning.“The offer price reflects neither the standalone value of Hugo Boss nor its medium- to long-term value-creation potential,” the company said.[ Mike Ashley’s Irish retail business posts profit of almost €1m a weekOpens in new window ]The bid comes as Hugo Boss grapples with weaker demand in the luxury sector, having previously reported declining sales and profits. Chief executive Daniel Grieder is seeking to revive growth through the company’s updated turnaround strategy, which management argues will unlock greater value for shareholders than the offer reflects.Despite rejecting the financial terms, Hugo Boss struck a conciliatory tone towards Frasers. It said the offer appeared primarily designed to allow Frasers to increase its stake above 30 per cent and did not envisage changes to the group’s strategy, operations or management.The 9 per cent VAT rate has been welcomed by restaurants but does the hospitality sector actually need it? Listen | 39:12Frasers, for its part, said in its offer document that it “recognises” Hugo Boss’s “economic and strategic objectives” and “intends to support” the company in pursuing them as a “long-term investor”, adding that it had no intention of pursuing structural changes.Hugo Boss’s boards said they took a neutral view of Frasers’ plans to increase its holding and welcomed its continued support for the company’s strategy and management team.“We look forward to maintaining a constructive relationship with Frasers Group as single largest shareholder of Hugo Boss,” said Stephan Sturm, chair of the supervisory board.To oversee the review of the bid, Hugo Boss established a special transaction committee. Michael Murray, Frasers’ chief executive and a member of Hugo Boss’s supervisory board, was excluded from all deliberations and decisions relating to the offer to avoid conflicts of interest.Frasers first acquired a stake in Hugo Boss in 2020 as part of its push further into premium fashion and has steadily built its holding since then. The retailer also holds derivative positions that could eventually give it majority control of the German group.Although the offer formally gives shareholders the opportunity to sell, people familiar with Frasers’ thinking have previously said the retailer’s objective is to increase its influence over Hugo Boss rather than acquire full ownership. - Copyright The Financial Times Limited 2026