Mulberry has turned down a significant takeover bid from Frasers Group, maintaining its current strategy.
- The proposed £83m offer by Frasers was considered not reflective of Mulberry’s true potential.
- Mulberry’s major shareholder, Chalice, supports the current direction with a new CEO at the helm.
- The company is committed to its capital raising plans to stabilise its financial future.
- Frasers Group already holds a 37% stake in Mulberry and was open to underwriting the proposed subscription.
The luxury handbag manufacturer Mulberry has decided to reject an £83 million takeover bid from Frasers Group, led by Mike Ashley. The Somerset-based brand believes the offer undervalues its potential future growth and current market positioning. This decision was revealed following discussions with their majority shareholder, Chalice, controlled by Ong Beng Seng and Christina.
Chalice has expressed confidence in Andrea Baldo, Mulberry’s recently appointed chief executive, as a pivotal figure in driving the brand towards a successful turnaround. In line with this, the company plans to continue its capital raising initiative, a strategy it deems critical to establishing a steady foundation for future growth and returning maximum value to shareholders.
Mulberry’s commitment to its capital raising plan, announced on 27 September 2024, allows all shareholders to partake equally. The board perceives this as the most equitable and efficient method of acquiring extra equity funding. The board reinforced its stance, asserting no intention of altering or abandoning these fundraising efforts.
Recognising Frasers as a significant and supportive investor, having previously stated willingness to underwrite the subscription, Mulberry remains open to further discussions. Frasers Group already owns 37% of Mulberry and valued its attempted takeover offer at 130p per share, totalling a £52.4m valuation for the remaining shares.
Established by Roger Saul in 1971, Mulberry has become iconic, despite current challenges largely attributed to tightened consumer spending. The company has experienced a downturn, reporting a pre-tax loss of £34.1m compared with a £13.2m profit the previous year.
Mulberry’s firm rejection of Frasers Group’s offer underscores its strategic focus on self-reliance and stakeholder value enhancement.
