Frasers Group’s recent activity has increased its stake in Mulberry amidst complex negotiations.
- After a rejected takeover bid, Frasers Group acquired 4 million more shares in Mulberry.
- The initial bid by Frasers was a £83 million offer, valuing shares at a notable 30% premium.
- Mulberry’s board decision to reject highlights their focus on future potential rather than immediate gain.
- Despite tensions, Mulberry and Frasers may collaborate on forthcoming financial movements.
In a significant financial manoeuvre, Frasers Group has boosted its investment in the luxury fashion brand, Mulberry, by purchasing an additional 4 million shares. This acquisition comes shortly after Mulberry rebuffed Frasers’ takeover attempt, asserting the bid did not reflect the company’s promising future value.
Frasers Group had initially made a bold offer of £83 million, equating to a price of 130p per share, representing a substantial 30% premium over the current market valuation. Despite this generous proposal, Mulberry’s board, with backing from major shareholder Challice, declined the offer, illustrating a strategic preference to bank on the company’s long-term potential rather than immediate profit.
The acquisition of the new shares was executed through existing clawback provisions, allowing major shareholders like the Sports Direct owner to increase their holdings. This move now elevates Frasers’ stake in Mulberry to over 37%, signifying a significant amount of influence within the company.
Tensions arose when Mulberry announced plans to proceed with a separate £10 million fundraise, a decision that initially ruffled feathers at Frasers. However, the luxury fashion house has expressed willingness to involve Frasers in their fundraising efforts, suggesting a potential path to collaborative engagements, despite the recent setbacks of the takeover attempt.
Frasers Group’s strategic acquisition of shares underscores a complex but potentially cooperative future relationship with Mulberry.
