Mulberry decided against Frasers Group’s £83m acquisition proposal, valuing each share at a 30% premium.
- Frasers Group, led by Mike Ashley, owns 37% of Mulberry, raising concerns about the retailer’s future.
- Mulberry’s board and majority shareholder Challice support the current business recovery strategy.
- An announced capital raise exceeding £10m aims to provide equal shareholder participation.
- Frasers Group must declare a firm offer or withdraw by 28th October under UK rules.
Mulberry has turned down an £83 million takeover offer from Frasers Group, which is controlled by Mike Ashley. The proposal, offering 130p per share, represented a 30% premium over Mulberry’s recent share price. According to the board of Mulberry, the proposal fell short of acknowledging the company’s significant future potential. Challice, the majority shareholder holding 56.1% of Mulberry, endorsed the company’s current turnaround strategy. This strategy is being spearheaded by the newly appointed CEO, Andrea Baldo, who commenced his role in July.
The decision to reject the bid comes amidst uncertainties raised regarding Mulberry’s financial outlook. The Frasers Group, already a significant stakeholder with 37% ownership, exhibited concerns about the retailer’s viability after auditors flagged doubts related to its going concern status. In contrast, Mulberry’s board plans to raise more than £10 million in capital, ensuring that shareholders can partake equally in its restoration initiatives. Frasers stated it is wary of a repeat of the Debenhams scenario, indicating its reluctance to allow Mulberry to be driven into administration.
Under UK takeover regulations, Frasers Group has been given a deadline of 28th October to formalise its offer or retreat. Meanwhile, Mulberry remains open to engaging with Frasers Group on a pro-rata basis for the latter’s share in the capital raising exercise. This approach reflects Mulberry’s commitment to maintaining balanced negotiations and keeping pathways open for potential strategic collaborations.
Mulberry’s refusal of the bid underscores its confidence in its future value and strategic direction.
