Frasers Group has made a significant move by placing an £83 million offer to takeover Mulberry.
- The bid follows Mulberry’s announcement to raise £10 million through new shares, which Frasers criticises for lack of transparency.
- Frasers’ offer is priced at 130p per share, a notable 30% premium to Mulberry’s recent share subscription price.
- Mulberry’s financial difficulties are highlighted by a reported £34.1m loss before tax in their recent financial results.
- Frasers is committed to preventing a scenario similar to Debenhams’ administration and is highly critical of Mulberry’s current state.
Frasers Group has put forward a substantial £83 million takeover bid for the luxury retailer Mulberry, asserting their intent to secure the company’s future amidst financial turbulence. This comes as a response to Mulberry’s recent announcement of a fundraising initiative aimed at raising £10 million through the issuance of new ordinary shares and a retail offer of up to £750,000. Frasers, possessing a 37% ownership stake in Mulberry, expressed dissatisfaction over their exclusion from early discussions regarding these plans.
The cash offer from Frasers values Mulberry shares at 130p each. This constitutes a significant 30% premium over Mulberry’s recent retail offer price of 100p per share and is 11% higher than the firm’s closing share price of 118p prior to the announcement. Following the news, Mulberry’s share prices experienced an uptick, trading at 128p during the morning session.
Mulberry’s recently published financials painted a challenging picture, with a loss before tax amounting to £34.1 million, contrasting sharply with a profit of £13.2 million recorded the previous year. This downturn was attributed to a challenging second half of the fiscal year, during which overall revenue experienced a 4% decline to £152.8 million year-on-year.
Frasers Group articulated their position through a statement, expressing profound concern regarding Mulberry’s ‘material uncertainty related to going concern’, as flagged in the latest audit opinion. Given their substantial shareholding, Frasers emphasised their refusal to witness a recurrence of the Debenhams fiasco, where a viable business was driven into administration. They stressed that the current situation is untenable, not only for Frasers but also for other minority shareholders.
Frasers Group’s bold bid reflects their strategic intent to stabilise Mulberry and avoid a repeat of past retail collapses.
