Permira cuts stake in Hugo Boss yet again

Tuesday, 10 February 2015

Permira Holdings Ltd. Has cut its stake in Hugo Boss AG below 14 percent, boosting the clothier’s free float in a move that may make it more attractive to institutional investors, reports Bloomberg. Still the largest stakeholder at the German upscale fashion brand, Permira said on Monday it would sell at least 7.35 million shares.

This is the fifth time the private equity group has reduced its stake in the past two years.

Previous time Permira sold some stock from Hugo Boss was in December, when the private equity house reduced its stake in the fashion retailer from 39 to 32 percent.

According to figures accessed by the ‘Financial Times’, the share sale is worth 806 million euro, based on Hugo Boss's current trading price. Additionally, Permira will sell 500 million euros worth of stock to PFC and Zignago Holding, two entities owned by Italy's Marzotto family.

Combined divestment reaches 1.3 billion euro

Permira is selling a 10.4 percent stake to the market, and a further 500 million euros to Italy’s Marzotto family, Hugo Boss said in a statement. The combined value of those divestments is about 1.3 billion euros, based on Monday’s closing price of 109.60 euros per share.

Permira has over the last two years been cutting its holding in the fashion house, in which it acquired a majority stake in 2007. When the free float rose to 66 percent after a stake sale December,12, Boss said it would make the stock more attractive to institutional investors.

After the last sale of shares, Permira will own 14 percent of Hugo Boss AG through its Red & Black subsidiary, down from the 32 percent it held to date.

As has transcended, the British private equity firm agreed to a 90 day lock-up before selling any of its remaining stake.

Hugo Boss shares have gained 7.8 percent this year, valuing it at 7.7 billion euros, highlights Bloomberg.

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