Permira accelerates sale of 850 million euros stake in Hugo Boss

Wednesday, 03 September 2014
European private equity firm Permira has launched an accelerated sale of 850 million euros of shares in German fashion retailer Hugo Boss. The stake´s price tag comes in at 101.50-107.05 euros per share, representing 11.2 percent of issued share capital. As indicated by a source familiar with the matter quoted by Bloomberg, Permira is selling 7.9 million shares at a price range of 101.50-107.05 euros. It is worthy a note that last session, shares in Hugo Boss closed at 107.05 euros apiece.

London-based Permira has sold 7.9 million shares at 101.5 euros a share, valuing the stake at 802 million euros, the private-equity firm’s Red & Black investment vehicle said in a statement issued Wednesday.

Reportedly, Citi and Bank of America Merrill Lynch would be running the deal, which will see Permira subject to a 90-day lockup on the residual shares, according to the same source.

This sale reduces the likelihood of Permira completely exiting from Hugo Boss

Commenting the move, Jurgen Kolb, an analyst at Kepler Cheuvreux, said in a note that this sale to institutional investors is substantially reducing the likelihood that Permira will divest entirely to a strategic or financial investor.

The exit road rather looks like further placements,” which may lead to increased pressure on the share price, Kolb wrote. He has a hold recommendation on the stock. As the sale increases the amount of shares traded on the stock market, Hugo Boss may become a candidate to enter the benchmark DAX Index (DAX), Kolb noted.

It is worth to remember that Permira took control of the German high-end retailer in 2007, acquiring a control stake in Hugo Boss for 5.3 billion euros. Before the latest divestment, Permira held 55.62 percent of the fashion house.

Following the announcement, Barclays analyst Julian Easthope raised his recommendation on the stock to ‘equal-weight’ from ‘underweight’.

On a related note and on the wake of the news, Hugo Boss AG (BOSS) shares fell the most in more than a year, losing 5.7 percent to 100.9 euros, the steepest intra-day decline since May 3, 2013, recalled various market sources.

Angela González Rodríguez

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