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Permira to Trim Hugo Boss Stake

The private equity fund plans a share offering that would reduce its stake to about 50.4 percent.

BERLIN — Permira Holdings Limited, the largest shareholder of Hugo Boss, is again shaving its stake in the German fashion giant.

Permira said it intends to place up to 3.96 million shares of Hugo Boss AG in an accelerated book-building process through its majority owned company, Red & Black Lux S.à.r.l, This represents 5.6 percent of total share capital, and would reduce Permira’s stake to about 50.4 percent.

This is the third share offering by Permira since November 2011, and Boss said that according to “information acquired, the book-building has already started.” Further information also indicates Red & Black is committed to a three-month lock up period for the remaining stake.

Permira’s involvement in Boss goes back to 2007, when it acquired Valentino, the former parent company of Hugo Boss.

The placement will increase the free float of Hugo Boss AG to approximately 48 percent of share capital. The group said it expects the higher free float to improve the share’s attractiveness among institutional investors and to increase the weighting in the MDAX.

Analysts are divided in their short-term outlook for the share, which closed at 105.80 euros Tuesday, close to the year’s high of 106.05 euros.

Last week, a Barclays analyst held Boss to its underweight rating, with a target price of 96 euros, noting Boss has excellent long-term prospects, but is currently impacted by a weak market environment. By contrast, Herbert Sturm, analyst with the German DZ Bank, recently raised its target price from 101 to 120 euros.