Luxury brand Mulberry rejects an £83m bid from Frasers Group, citing future potential.
- Mulberry remains firm in its plan for a capital raise despite takeover approach.
- Majority shareholder Chalice supports Mulberry’s strategy and new leadership.
- Frasers Group already holds a significant 37% stake in Mulberry.
- Mulberry’s recent financial results show a shift from profit to loss.
Luxury handbag company Mulberry has declined an £83 million takeover proposal from Mike Ashley’s Frasers Group, underscoring its confidence in the brand’s future potential. The Somerset-based fashion brand stated that Frasers’ offer did not adequately reflect its substantial long-term value. Notably, Frasers Group already owns a 37% share of Mulberry, worth £52.4 million of the company it does not own, valuing the stake at 130p per share.
Mulberry has consulted with its majority shareholder, the Singapore-based Chalice, which is controlled by billionaire Ong Beng Seng and his wife Christina, and decided to continue with its existing strategy. The company is pinning its hopes on newly appointed CEO Andrea Baldo to spearhead a turnaround, bolstered by a planned capital raise. Mulberry’s board is committed to executing a turnaround that maximises value for all shareholders, and sees the capital raise as integral to this plan.
The board has indicated no intention of withdrawing or terminating the recent subscription or retail offer, asserting that this approach provides all shareholders with equitable opportunities for additional equity funding. Despite Frasers Group’s willingness to underwrite the subscription, Mulberry welcomes further discussions for its participation on a pro-rata basis.
Founded in 1971 by Roger Saul, Mulberry has its roots in Somerset, and its heritage is reflected in its iconic tree logo. However, in recent times, the brand has experienced challenges, largely attributable to tightening consumer spending, resulting in a financial loss over the past year. The company’s latest annual results reveal a pre-tax loss of £34.1 million, a significant shift from a £13.2 million profit the previous year.
Mulberry’s steadfast strategy is a bet on potential, prioritising long-term shareholder value over immediate acquisition offers.
