Mulberry has turned down an £83m takeover offer from Frasers Group, demonstrating its commitment to a standalone future.
- The luxury retailer received a cash proposal of 130p per share, offering a 30% premium on its share price.
- Mulberry’s board, supported by majority shareholder Challice, believes in the company’s future value and current turnaround strategy.
- Frasers Group controls 37% of Mulberry’s shares and raises concerns over its ongoing viability.
- Mulberry plans to raise over £10m in cash, inviting all shareholders to partake in its recovery.
Mulberry has firmly rejected an £83m acquisition proposal from the Frasers Group, a decision signalling confidence in its independent path forward. Frasers Group, led by the influential Mike Ashley, proposed a cash offer amounting to 130p per share, which is a significant 30% premium over Mulberry’s prevailing share price.
The board of Mulberry consulted with financial advisers and its primary stakeholder, Challice, which possesses a 56.1% shareholding in the company. After thorough evaluation, the board concluded that the offer underestimated the intrinsic future potential of the luxury retailer. Challice has expressed strong support for the current turnaround plan, which is being spearheaded by the newly appointed CEO, Andrea Baldo, who took the helm in July.
Frasers Group, which already owns a substantial 37% of Mulberry’s shares, has voiced apprehension regarding the retailer’s future. The concerns were heightened after auditors highlighted ‘material uncertainty related to going concern’ just days before the bid was proposed. Frasers has made it clear that it is unwilling to witness a repeat of the Debenhams scenario, where an ostensibly viable enterprise was forced into administration.
Despite the rejection of this takeover bid, Mulberry is pressing ahead with plans to raise over £10m in cash. This initiative aims to grant all shareholders, including the Frasers Group, an equal chance to invest in the company’s recovery.
Under UK takeover regulations, Frasers Group faces a deadline of 28 October to either extend a concrete offer or withdraw completely. Mulberry has indicated its openness to engage with Frasers on a proportional basis concerning their involvement in the capital raise.
Mulberry remains committed to its independent recovery strategy despite external pressure from Frasers Group.
