Frasers Group has decided to halt its acquisition attempt of Mulberry due to governance issues, with Mulberry’s board rejecting the latest offer.
- Frasers Group, holding a 37% stake in Mulberry, offered a revised bid of 150p per share, valuing the business at £111 million.
- Mulberry’s board found the offer “untenable” and plans to focus on strengthening its commercial strategies amidst market challenges.
- Frasers expresses disappointment but stresses its ongoing support for Mulberry, highlighting concerns over the governance and financial health of the company.
- Frasers seeks representation on Mulberry’s board despite withdrawing the takeover bid.
Frasers Group, a prominent entity in the retail sector, has formally announced its decision to cease its pursuit of a takeover of Mulberry, a brand synonymous with luxury handbags. This decision comes in light of governance concerns that have surfaced following the board’s unanimous rejection of Frasers’ latest offer.
Earlier this month, Frasers had tabled a revised cash proposition, setting the offer at 150p per share for shares not already owned, thereby valuing the company at approximately £111 million. Despite the financial allure, Mulberry’s board labelled the offer as “untenable,” indicating a strategic decision to instead direct focus on enhancing the company’s commercial strategies to combat rising market pressures.
In its response, Frasers Group, which maintains a significant 37% ownership in Mulberry, acknowledged a “disappointing outcome” but reiterated its enduring commitment to supporting this cherished British entity. The group cited increasing unease about several aspects, notably Mulberry’s governance, the apparent deficiency in commercial planning amidst intensifying market challenges, and crucially, the financial predicament that Mulberry currently encounters.
Furthermore, the conglomerate voiced its opposition to any recurrence of scenarios where Mulberry’s board might opt for isolated engagement with Challice, a notable shareholder, referring specifically to the recent emergency infusion of £10 million. This scenario underscores the intricate dynamics of boardroom negotiations and shareholder relations within the luxury brand.
Despite retracting its takeover bid, Frasers Group is lobbying for a representative to be appointed to the Mulberry board, a move indicating a desire to influence the company’s future direction.
Frasers Group’s withdrawal from the Mulberry acquisition highlights the complexities in corporate governance and shareholder alignment in today’s challenging market landscape.
