Frasers to advance Harvey Nichols bid as Hugo Boss clears German merger control

Frasers continues to push forward with two of its recent takeover bids. The retail group is expected to submit a bid for department store Harvey Nichols and has also received merger control clearance from the European Commission to take forward its takeover offer of Hugo Boss. 

Frasers Group and NEXT both face a 28 July deadline to submit offers for Harvey Nichols, according to Sky News, while unidentified international bidders are reportedly working to a separate timetable.

Harvey Nichols is being sold through advisers at FTI Consulting after 35 years under the ownership of Hong Kong businessman Sir Dickson Poon. The process places its Knightsbridge flagship and wider store estate in play, although reaching the bid deadline does not guarantee that a transaction will be completed.

Frasers Group entered the process two weeks ago, despite concerns among some Harvey Nichols suppliers about its potential ownership. Frasers owns Sports Direct, Flannels and House of Fraser.

The Harvey Nichols deadline coincides with Frasers’ pursuit of German premium fashion group Hugo Boss, with its offer becoming unconditional today, following the takeover bid’s approval by German authorities. 

Harvey Nichols turnaround plan requires fresh funding

Bidders for Harvey Nichols have been asked to commit between £50 million and £60 million over the medium term to fund the luxury department store’s transformation plan, Sky News previously reported.

The proposed investment, which would be separate from the acquisition price, would support a refurbishment of the Edinburgh store, international expansion, digital development and the management team’s business plan.

Apart from Frasers Group and NEXT, potential bidders for the department store include Modella Capital, the owner of Hobbycraft and TGJones, as well as Dubai-based Chalhoub Group and India’s Reliance Retail. 

NEXT emerged as a potential bidder earlier this month. It remains unclear whether NEXT would retain Harvey Nichols’ regional store network or focus on the brand and its intellectual property.

FTI Consulting will now assess the bids submitted under the auction timetable, including the proposed financial support for the retailer’s turnaround.

Frasers Group gets clearance for Hugo Boss takeover bid 

In the latest developments on the Hugo Boss bid, Frasers Group said its takeover offer for the German luxury brand had received merger control clearance from the European Commission. The approval removes the final regulatory obstacle and means the cash offer for the German fashion company is now legally unconditional.

Frasers Group also extended the acceptance period for the offer until midnight 13 August in Frankfurt local time. 

Frasers crossed Germany’s 30% mandatory-bid threshold last week, after it acquired a further 2,549,900 shares in the company.

Yesterday, it was reported by The Times that Frasers Group was considering appointing its Chief Executive, Michael Murray, to lead Hugo Boss if its takeover of the German premium fashion company succeeds. 

The proposed appointment would give Frasers direct operational control of Hugo Boss and represent a change from its earlier support for incumbent CEO Daniel Grieder when it originally launched its offer in June. 

The group had previously declared its original €38 price as final. Frasers first launched its bid on 10 June, valuing the remaining 73.94% of the Hugo Boss brand at about €1.98 billion.

Almost one month later, Hugo Boss’s management and supervisory boards unanimously recommended that shareholders should reject the unsolicited approach, calling it financially “inadequate”.

Frasers continues its pursuit of Accent Group 

The retail group is also pursuing Australian footwear retailer Accent Group, which has, however, firmly rejected its approach. Last week, Frasers extended that offer until September, with its other terms unchanged.