Frasers Group’s £111 million offer to acquire Mulberry has been declined by Mulberry’s majority stakeholder.
- Challice, holding a 56.4% stake in Mulberry, believes the timing is unsuitable for such a sale.
- Mulberry’s financial challenges include a recent reported loss and a decline in revenue.
- Frasers Group has until 28 October to reconsider and potentially formalise its offer.
- Leadership changes at Frasers Group coincide with these acquisition attempts, with Ger Wright transitioning to a non-executive director role.
Frasers Group, a prominent shareholder with 37% ownership in Mulberry, has escalated its bid to acquire the luxury brand. The increased offer of £111 million, equivalent to 150 pence per share, followed a previously rejected proposal of £83 million. Despite this, the majority stakeholder, Challice, which controls 56.4% of Mulberry, has expressed a firm stance against the sale.
On 11 October, Challice released a statement emphasising its viewpoint that the timing was inopportune for such an acquisition, highlighting concerns regarding the distractions posed by the potential offer to the company’s management. Challice explicitly stated its lack of intention to divest its shares to Frasers or to engage in any commitments related to the offer. This declaration was intended to dissuade Frasers from pursuing the purchase further.
In response, Mulberry’s board of directors has acknowledged Challice’s statement and is actively consulting with advisers to evaluate the company’s position. The board cautioned that there is no certainty regarding a formal offer being presented, nor the conditions it might entail. Frasers Group has been allotted a deadline of 5pm on 28 October to solidify its proposal, should it decide to proceed.
Financially, Mulberry is navigating a challenging phase, as evidenced by its latest fiscal report. The company announced a loss before tax of £34.1 million, a significant downturn from the previous year’s £13.2 million profit. Revenue also witnessed a 4% reduction, attributed to a particularly testing second half of the fiscal year.
Amidst these developments, Frasers Group is experiencing a shift in its leadership dynamics. Ger Wright, the managing director of sport, will vacate her position on 30 November but will retain a strategic role as a non-executive director. Michael Murray, CEO of Frasers Group, acknowledged Wright’s substantial contributions and expressed anticipation for her continued influence on the company’s strategic ambitions.
The situation remains fluid as Frasers Group evaluates its next steps under the constraints set by Challice and amidst Mulberry’s financial adversity.
