Frasers Group, the second-largest shareholder in Mulberry, has faced rejection in their attempt to acquire the luxury brand.
- Frasers increased their offer to £111m in an attempt to purchase Mulberry, after an initial £83m bid was turned down.
- Challice, holding a 56.4% stake in Mulberry, deemed the timing unsuitable for a sale, causing a setback for Frasers.
- Mulberry has communicated that discussions continue but there is no certainty of a takeover offer materialising.
- The situation remains fluid, with Frasers having a deadline to make a definitive offer by 28 October.
Frasers Group, aiming to consolidate control over Mulberry, escalated its cash proposal to £111 million, hoping to sway the majority stakeholders. Their previous attempt, an £83 million offer, was declined, necessitating this increased bid to gain traction with the shareholders.
Challice holds a significant stake of 56.4% in Mulberry and has expressed its stance against selling at this juncture. The company stated, “an inopportune time for Mulberry to be sold,” citing concerns about disruptions within the organisation.
Despite the rejection, Mulberry’s board is actively consulting with advisors, although they caution that there is no assurance of an offer being extended or accepted. The uncertainty lingers over whether terms will be agreeable should a bid be made.
Frasers, possessing 37% of Mulberry shares, has a tight window to cement their intentions, with a deadline set for 5pm on 28 October. Until then, they have the opportunity to secure further shares, as demonstrated by their recent purchase of 3.93 million shares, slightly increasing their stake.
This backdrop of negotiations unfolded in a year where Mulberry’s financial performance dipped, reporting a pre-tax loss of £34.1 million and a revenue fall of 4%, attributed to a difficult second half.
The outcome of Frasers Group’s pursuit of Mulberry hangs in the balance as the deadline approaches.
