Mulberry Rejects Frasers Group Takeover Bid
Mulberry, the iconic British luxury brand, has rejected an £83 million takeover bid from Mike Ashley's Frasers Group. The board stated that the offer "did not recognise the company's substantial future potential value."
Mulberry's decision comes after careful consideration and consultation with its majority shareholder, Challice. Challice, controlled by Malaysian billionaire Ong Beng Seng and his wife Christina, holds a 56.1% stake in the company.
The brand expressed confidence in its recent appointment of Andrea Baldo as CEO, believing it provides a "solid platform" for a turnaround that would deliver the best value for all shareholders. Following the rejection, Mulberry's shares rose 4.8% to 130p.
Frasers Group, which made a 130p-per-share bid after a surprise £10 million rights issue, has yet to respond. The bid represented an 11% premium to Friday's closing price. The Sports Direct owner argued that it was the "best steward" to restore the struggling leather goods brand to profitability. However, Frasers expressed concerns about Mulberry's ongoing financial challenges, citing its auditor's warning about "material uncertainty" related to the company's ability to continue as a going concern.
Frasers was also frustrated by the timing of the rights issue announcement, calling the lack of engagement "untenable" for Frasers and other minority shareholders. Mulberry, which recently reported a £34 million pre-tax loss, plans to use the fresh capital to stabilize its balance sheet and allow Baldo to implement his strategy for the brand.
Under UK takeover rules, Frasers has until 5pm on 28 October to either make a firm offer or walk away. If it chooses to walk away, it will not be able to make another bid for six months unless another offer is tabled by a rival bidder.