Mulberry’s principal shareholder has rejected a revised takeover proposal from the Frasers Group, citing it as an “unwanted distraction.”
- Challice, which controls a majority stake in Mulberry, remains firm in its decision not to sell, despite the increased offer from Frasers.
- Frasers Group’s renewed interest comes as Mulberry reports substantial financial challenges but remains hopeful about its turnaround strategy.
- The rejection puts a stumbling block in Frasers’ efforts to secure a controlling interest in the luxury brand.
- The deadline looms for Frasers to either formalize their offer or abandon the bid altogether.
Challice, the majority stakeholder in Mulberry with a 56.1% stake, has categorically declined Frasers Group’s revised takeover offer. Frasers upgraded its offer from 130p to 150p per share, but Challice, managed by Singaporean billionaires Ong Beng Seng and Christina Ong, remains unmoved. Challice’s firm decision reflects their intention to maintain control and steer Mulberry through its ongoing recovery efforts.
The rejection of Frasers’ bid highlights Challice’s influence within Mulberry, where Frasers already owns a 36.8% stake. Without Challice’s approval, Frasers’ ambition to obtain a controlling interest exceeding 50% is significantly hampered.
Mulberry, despite grappling with a £34 million pre-tax loss and declining sales, remains optimistic about its recovery. The company has initiated measures such as appointing new CEO Andrea Baldo and executing a £10.75 million share placing to stabilise its operations.
Frasers Group argues that it can navigate Mulberry back to profitability, warning against what it describes as potential “Debenhams situation.” Nevertheless, Frasers’ pursuit is challenged by the determined opposition from Challice.
Frasers faces a crucial deadline of 5pm on October 28 to decide if it will proceed with a formal takeover offer or retract its bid. This time constraint adds further pressure to the ongoing negotiations.
Mulberry’s steadfast rejection of Frasers’ offer underscores its resolve to independently pursue financial recovery amidst significant economic challenges.
