Frasers Group has increased its stake in Mulberry following a rejected takeover bid.
- The company has subscribed to 3.9 million shares at 100 pence each.
- Frasers Group now holds a 37.3% share in Mulberry.
- Challice remains the largest shareholder with a 56% stake.
- Mulberry remains open to further offers despite recent financial challenges.
Frasers Group has strategically increased its shareholding in Mulberry just days after the latter dismissed a takeover proposal from the retail giant. The group, led by Mike Ashley, has subscribed to nearly four million shares at 100 pence each, marking a substantial increase in its stake to 37.3%. The move does not necessitate a mandatory offer to other shareholders, allowing Frasers to augment its influence without the obligation to acquire the business outright.
Challice, controlled by billionaire Ong Beng Seng and his wife Christina, continues to hold a dominant 56% interest in Mulberry, overshadowing Frasers Group’s new position. Despite the expanded stake, the Singapore-based entity remains firmly in control, underscoring the competitive dynamics within Mulberry’s shareholder framework.
Mulberry’s rejection of the takeover bid was predicated on its belief in the strong potential of its recent initiatives under the leadership of CEO Andrea Baldo. The company remains confident in its turnaround strategy, which hinges on substantial capital raising to reposition itself in the market. Mulberry believes that these efforts will ultimately deliver value to all stakeholders involved.
This confidence is juxtaposed against a backdrop of significant financial difficulties for Mulberry. The company cited a challenging consumer spending environment as a factor leading to a pre-tax loss of £34.1m for the last financial year, starkly contrasting with a £13.2m profit from the previous year. Nevertheless, Mulberry has indicated its openness to reconsidering future offers from Frasers Group, highlighting both its present vulnerability and potential appeal.
Mulberry, headquartered in Somerset where it was founded, is navigating a turbulent period with a keen eye on strategic opportunities to bolster its financial health and market standing. The developments reflect broader trends within the retail sector, as companies adapt to shift in consumer behaviour and economic pressures.
Frasers Group’s increased stake in Mulberry highlights the strategic maneuvers within the luxury fashion sector amidst challenging economic times.
