Hugo Boss Shares Slide as Permira Reduces Stake in Clothier

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Hugo Boss AG fell in early Frankfurt trading after buyout firm Permira Holdings Ltd. further reduced its stake in the German clothier, fueling speculation that it may seek to sell more of its holding later this year.

The shares slid as much as 5.6 percent to 103.50 euros. Permira will own less than 14 percent of the company after selling a 10.4 percent stake to the market, and a further 500 million euros ($565 million) to Italy’s Marzotto family. The investor has for the last two years been cutting its holding in the fashion house, having acquired a majority stake in 2007.

“It’s an orderly exit,” Volker Bosse, an analyst at Baader Bank near Munich, said by phone. “It’s conceivable that Permira will reduce its stake further throughout the year.”

Even as Permira sells out of the business, the shares have advanced this year as the additional free float has made the stock more appealing to institutional investors. A few more placements from Permira might make Hugo Boss a candidate to join Germany’s benchmark DAX Index, Bosse said.

The shares were down 2.8 percent at 106.5 euros as of 11:03 a.m., trimming this year’s gain to 4.7 percent.

Permira sold the stock at 102 euros a share, according to a person familiar with the transaction.

The combined value of the divestments is about 1.3 billion euros, based on Monday’s closing price.

Selling Stakes

Zignago Holding SpA, a company owned by the Marzotto family, said it bought 5 million Hugo Boss shares, representing a stake of about 7 percent. Gaetano Marzotto already sits on Hugo Boss’s supervisory board. Permira acquired control of Valentino Fashion Group SpA from the Marzottos in 2007.

Hugo Boss declined to comment on the share sale.

Shareholders including private-equity firms have raised more than $15 billion selling stakes in companies in Europe, the Middle East and Africa this year, according to data compiled by Bloomberg. That’s up from $9 billion in the same period last year as more owners pare their stakes after the busiest year for listings since 2007.