BERLIN — Shares of Hugo Boss AG fell 5.7 percent to 101 euros, or $132.50 at current exchange, at the close of trading on the Frankfurt Stock Exchange Wednesday after Permira Holdings Ltd. revealed plans to further reduce its stake.
Permira, the largest shareholder of Hugo Boss with about a 50.4 percent stake, intends to place up to 7.9 million shares of Hugo Boss AG in an accelerated bookbuilding process through its majority owned company Red & Black SA. The stake is valued at 846 million euros, or $1.1 billion at current exchange, and represents about 11.2 percent of total share capital.
The placement will increase the free float of Hugo Boss to around 59 percent. As in May, when Permira last shaved its stake by about 6 percent, Boss said the higher free float is expected to improve the share’s attractiveness among institutional investors and to increase the weighting in the MDAX.
Permira’s involvement in Boss goes back to 2007, when it acquired Valentino, the former parent company of Hugo Boss. Considered the jewel of that acquisition, Hugo Boss has consistently grown the business, and the share price has increased significantly over that period. However, as one analyst noted, the share also dipped after May’s placement, but then quickly recovered.
Permira has not gone on the record regarding its remaining stake. Reports however suggest Permira plans to further reduce its holding in the German fashion company in successive stages after the required 90 lock-up period.