Hugo Boss Drops as Permira Plans Stake Sale in Suitmaker

Hugo Boss AG dropped the most in eight months in Frankfurt trading after majority owner Permira Advisers LLP said it plans to sell a stake in the German luxury- clothing maker.

Hugo Boss fell as much as 6.1 percent to 87.12 euros, the steepest intraday decline since Sept. 11, and was trading down 5.8 percent at 9:58 a.m. That pared the stock’s gain this year to 9.5 percent, valuing the Metzingen-based fashion producer at 6.15 billion euros ($8.06 billion).

Permira seeks to dispose of 7 million Hugo Boss shares, or about 10 percent of the total, in an accelerated bookbuilding, the London-based private-equity firm said in a statement yesterday. The stock is offered in a range of 87.50 euros to 88.50 euros a share, down from an earlier proposal of 89.25 euros to 90.50 euros a share, according to a term sheet obtained by Bloomberg News.

Permira inherited the stake when it bought a majority holding in 2007 in Milan-based Valentino Fashion Group SpA, Hugo Boss’s parent company at the time. Permira sold its Valentino assets to a group led by Qatari investors in July 2012. The private-equity firm doesn’t plan to dispose of more shares in Hugo Boss, according to a person familiar with the matter.

After the transaction is completed, Permira is expected to retain a 56 percent stake in Hugo Boss, the German company said in a statement today. Permira currently owns 65.56 percent of Hugo Boss stock through its Red & Black Holding GmbH unit. Freely traded stock in the fashion company will represent about 42 percent of the share capital after the disposal, it said.

Hugo Boss reiterated its earnings forecast for the year yesterday after saying its retail business increased sales by 14 percent in the first quarter as it opened more outlets.

To contact the reporter on this story: Julie Cruz in Amsterdam via jcruz6@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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