Mulberry has rejected an £83 million takeover bid from the Frasers Group, highlighting its confidence in future growth under new leadership.
- The offer was thoroughly assessed by Mulberry’s board with input from majority shareholder, Challice, who owns 56.1% of the company.
- Mulberry’s share price increased by 4.8% to 130p following the decision to reject the offer.
- Frasers Group contends it is the ideal caretaker to return Mulberry to profitability amid ongoing financial challenges.
- Mulberry plans to stabilise its financial position and implement CEO Andrea Baldo’s strategy with the recent capital influx.
Mulberry recently declined an £83 million acquisition proposal from the Frasers Group. The board of directors stated that they had diligently reviewed the offer and consulted with Challice, the major shareholder controlling 56.1% of the firm, led by Malaysian billionaire Ong Beng Seng and his wife, Christina. Their conclusion was based on a belief in the newly appointed CEO Andrea Baldo’s potential to revitalise the company, which they referred to as a ‘solid platform’ for turning the business around.
Following the rejection announcement, Mulberry’s shares climbed by 4.8% to 130p. This decision comes after Frasers Group proposed a 130p-per-share acquisition following a surprise £10 million rights issue. Frasers Group believes they can best guide Mulberry back to financial health, expressing concerns over the brand’s enduring financial woes, particularly after an auditor pointed out ‘material uncertainty’ about its ongoing operational viability.
Amid these developments, Frasers expressed dissatisfaction with the timing of Mulberry’s rights issue announcement and described the lack of communication as ‘untenable’ for Frasers and other minority shareholders. Mulberry, which recently reported a £34 million pre-tax loss, intends to use the recently acquired funds to stabilise its balance sheet, allowing Andrea Baldo to implement planned strategic changes.
According to UK takeover regulations, Frasers Group has until 5pm on 28 October to put forward a definitive offer or withdraw. In the event of withdrawal, Frasers will be unable to submit another proposal for a six-month period, unless a competing offer is made by another party.
Mulberry’s rejection of the Frasers Group proposal underlines its firm confidence in the strategic direction set by its new leadership.
