May 3, 2013
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Permira sells further 10 percent stake in Hugo Boss

May 3, 2013

FRANKFURT - Private equity firm Permira is selling a further 10 percent stake in German fashion house Hugo Boss, cashing in on an investment whose share price has doubled since it first invested in 2007.

Permira, which owned 65.56 percent of Hugo Boss via its Red & Black vehicle ahead of the placement, last sold shares in Hugo Boss in November 2011, when it reduced its stake by 6.4 percent.

Citi analyst Thomas Chauvet said Permira's move to invest in Hugo Boss in 2007 was a sound one. "We do not think today's offering marks an acceleration of the exit process," he wrote in a note to clients.

Since Permira invested in mid-2007, the price of Hugo Boss shares has nearly doubled, reaching a record high on Thursday of 94 euros.

The placement of 7 million shares on Friday comes a day after Hugo Boss reported a bigger than expected drop in first-quarter sales on weakness in Europe and China, although it confirmed its targets for 2013.

The placement is being carried out in an accelerated bookbuilding process that has already started, Hugo Boss said.

The indicative price range for the shares is 89.25-90.50 euros, a person familiar with the transaction said.

That represents a 2.4-3.7 percent discount to Thursday's closing price of 92.75 euros and makes the sale worth between 624.7 million and 633.5 million euros. Hugo Boss shares dropped almost 6 percent in early trading on Friday.

The source said Morgan Stanley was acting as bookrunner.

Red & Black has committed to hold on to its remaining shares for six months, Hugo Boss said.

Permira declined to comment beyond the statement from Hugo Boss.

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