Challice, a major stakeholder in Mulberry, has turned down Frasers’ revised takeover proposal, deeming it an unnecessary diversion.
- Frasers Group’s offer was raised to 150p per share but was again rebuffed by Challice, the controlling stakeholder.
- Without Challice’s approval, Frasers faces significant challenges in securing a controlling interest in Mulberry.
- The refusal comes amidst Mulberry’s financial recovery efforts, overseen by new CEO Andrea Baldo.
- Frasers has a deadline until October 28 to decide on making a formal offer or stepping back.
Challice, which holds a majority stake of 56.1% in Mulberry, has firmly rejected Frasers Group’s revised takeover offer. This decision is pivotal as Frasers, already owning 36.8% of Mulberry, sought to increase their stake by offering 150p per share after an initial 130p offer was turned down. The rejection highlights that Frasers will face substantial obstacles in acquiring more than 50% ownership without Challice’s consent.
The Ong family, leading Challice, firmly believes that Frasers’ bid is poorly timed, labelling it a distraction from Mulberry’s ongoing recovery efforts. Mulberry has been navigating through financial difficulties, recently reporting a pre-tax loss of £34 million and a decline in sales, reflecting wider challenges within the luxury goods market.
Despite the financial setback, Mulberry remains optimistic about its recovery plan. The recent appointment of Andrea Baldo as CEO and a strategic move involving a £10.75 million share placing are initiatives intended to stabilise the company’s operations. This restructuring aims to rejuvenate the brand, known for its iconic Bayswater handbags, despite the turbulent luxury market.
Frasers Group, on the other hand, is resolute in its belief that it can revitalise Mulberry’s fortunes. The group argues that its stewardship could prevent a fate akin to other struggling brands, referring directly to avoiding ‘another Debenhams situation.’ Frasers must now decide whether to formalise its offer by the set deadline of 28 October or to abandon its pursuit altogether.
The future of Mulberry remains uncertain as the deadline approaches and negotiations continue.
