Frasers Group has expanded its share in Mulberry after the latter rejected a takeover bid.
- Mike Ashley’s Frasers Group now owns 37.3% of Mulberry’s shares.
- The rejected offer from Frasers did not reflect Mulberry’s perceived future value.
- Mulberry plans to focus on capital raising under new CEO Andrea Baldo.
- Frasers Group’s stake increase doesn’t trigger a mandatory offer for other shareholders.
Frasers Group has moved to increase its stake in the esteemed British fashion house, Mulberry, after a recent takeover proposal was declined by the retailer. Frasers Group, owned by renowned businessman Mike Ashley, has acquired 3.9 million shares in Mulberry at a price of 100 pence per share, propelling their total holding to 37.3%. Despite this significant increase, Frasers Group is not obliged to make a compulsory cash offer to the remaining shareholders.
The decision to rebuff the takeover bid highlights Mulberry’s confidence in its strategic direction. The company asserted that the proposal from Frasers Group failed to acknowledge its substantial potential for future growth. As such, Mulberry has placed its faith in its newly appointed chief executive, Andrea Baldo, to spearhead efforts aimed at revitalising its operations. Mulberry is proceeding with plans for capital raising, which it believes will furnish a stable foundation for executing a turnaround strategy that maximises shareholder value.
Mulberry has faced challenging times in recent years, attributing its difficulties to a tightening of consumer spending. In the latest financial reports, the company revealed a downturn, sliding to a pre-tax loss of £34.1 million, a stark contrast to the £13.2 million profit reported in the prior year. Nevertheless, Mulberry remains resolute in its strategy to overcome these hurdles under the leadership of Andrea Baldo.
The timeline for Frasers Group to make any further offers is constrained by the stipulations of the takeover code, with a deadline set for October 28 at 5 pm. Meanwhile, the largest shareholder in Mulberry continues to be Challice, based in Singapore and controlled by billionaire couple Ong Beng Seng and Christina Ong, holding a 56% stake in the company.
Frasers Group has fortified its position in Mulberry whilst the retailer remains steadfast in its growth strategy under new leadership.
