Frasers Group has abandoned its £111m takeover bid for Mulberry, seeking a board appointment instead.
- The decision follows Mulberry’s rejection of an improved offer and a lack of engagement from its board.
- Frasers owns 37% of Mulberry and insists on more substantial involvement and governance improvements.
- Mulberry’s shares have fallen 7% amid a global downturn in luxury markets due to inflation.
- Frasers criticises Mulberry’s reliance on Challice, the major shareholder, for key decisions.
Frasers Group, led by prominent businessman Mike Ashley, has decided to discontinue its £111 million takeover proposal for luxury brand Mulberry, after the latter’s board declined the latest enhanced offer and failed to engage effectively. Frasers’ decision comes ahead of the impending bid deadline and has been influenced significantly by Mulberry’s firm stance and lack of responsiveness.
Following the announcement, Mulberry’s share price experienced a decline of 7%, reflecting market scepticism amidst global economic challenges. Frasers, which currently holds a 37% stake in Mulberry, is urging the company to deliver a ‘credible’ business plan. The luxury handbag maker, whose shares have depreciated by over 40% in the past year, is largely controlled by Challice, owned by Singaporean entrepreneur Christina Ong and her husband, Ong Beng Seng.
Mulberry’s board has been firm in its refusal of Frasers’ revised offer of 150p per share, labelling it as ‘untenable’. The company is focusing on enhancing its business performance independently, buoyed by Challice’s decision not to sell its stake and to reject further negotiations with Frasers.
Frasers has expressed its ongoing support for Mulberry, yet remains critical of its current governance structure. It is particularly concerned about decisions being made exclusively with Challice, including a significant financial transaction involving a £10 million emergency subscription made in private last month.
As part of its strategy to engage more deeply with Mulberry and Challice on various issues, Frasers is also lobbying for a formal board appointment. This move is part of their broader goal to expand their footprint in the luxury sector, as seen with their investments in other brands such as Hugo Boss.
Frasers remains committed to Mulberry, while advocating for improved corporate governance and strategic engagement.
