Frasers Group’s pursuit of Mulberry takes a dramatic turn with new share acquisitions and boardroom tensions.
- Frasers Group confirms purchase of 3.93 million Mulberry shares at 100 pence each, amidst ongoing acquisition attempts.
- Mulberry’s move to raise £10m was flagged as uncommunicated by Frasers Group, prompting critical remarks.
- The involvement of Mulberry’s majority owner, Ong Beng Seng, in legal issues adds complexity to the acquisition saga.
- Roger Saul, the founder of Mulberry, expresses preference for a partnership with LVMH over Frasers Group.
In a strategic move, Frasers Group has enhanced its position within the luxury retail sector by acquiring an additional 3.93 million shares in Mulberry, indicating a firm intent to secure control over the handbag manufacturer. This acquisition comes at a critical juncture following Frasers Group’s unsuccessful £83 million takeover bid for Mulberry, which was announced earlier but subsequently declined by the latter’s board.
The situation is further complicated by Mulberry’s plans to raise £10 million through new ordinary shares and a retail offer worth up to £750,000. This proposed fundraising, which caught Frasers Group by surprise, was met with criticism from the group, highlighting a ‘total lack of engagement’ from Mulberry. The remark underscores Frasers Group’s insistence on transparency and effective communication, reminiscent of the cautionary experience cited with Debenhams.
Adding to the drama, financial records disclose that Mulberry experienced a financial decline, reporting a pre-tax loss of £34.1 million, contrasting starkly with a previous year’s profit of £13.2 million. The luxury brand also suffered a 4% drop in annual revenue, attributed largely to a ‘challenging’ second half of the financial year.
In another twist, Ong Beng Seng, Mulberry’s majority owner and influential figure in its boardroom, faces legal challenges in Singapore, involving allegations of obstruction of justice related to a gifting scandal. This development raises uncertainties regarding Mulberry’s leadership and strategic decision-making amidst Frasers Group’s clamor for acquisition.
Roger Saul, the pioneering founder of Mulberry, voiced his opinions on the acquisition scenario, indicating that a collaboration with LVMH might better suit Mulberry’s brand ethos than a Frasers take over. His statement suggests a possible divergence in vision between Mulberry’s original brand values and its current strategic directions.
The dynamic developments highlight the complex interplay of financial strategies, stakeholder influence, and legal hurdles shaping the future of Mulberry.
