Mulberry has declined an £83m takeover offer from Frasers Group, opting to continue its current growth strategy.
- Frasers Group’s proposal valued Mulberry at 130p per share, offering a 30% premium on recent share price assessments.
- Following consultations, Mulberry’s board, alongside major stakeholder Challice, expressed confidence in the company’s future value.
- Frasers holds 37% of Mulberry’s shares and expressed apprehension following concerns from auditors regarding the company’s ongoing viability.
- UK regulations necessitate a definitive offer from Frasers by 28 October or withdrawal from the negotiation process.
Mulberry, a luxury fashion retailer, has rejected an £83 million takeover bid from Frasers Group. The offer, set at 130p per share, presented a 30% premium compared to Mulberry’s recent share price. This significant proposal aimed to acquire the embattled retailer, yet it wasn’t sufficient to convince Mulberry’s board.
Having conferred with financial advisors and Challice, the majority shareholder owning 56.1% of Mulberry, the board concluded that Frasers Group’s offer undervalued the company’s substantial future possibilities. Challice has expressed unwavering support for the recovery plans devised under the leadership of the new CEO, Andrea Baldo, who joined in July.
The rejection of the takeover bid propels Mulberry to seek more than £10 million through a capital raise. This approach provides all shareholders with an opportunity to participate equally in the company’s strategic recovery efforts, bolstering the retailer’s financial stability.
Frasers Group, which already owns a substantial 37% shareholding in Mulberry, voiced concerns about the retailer’s future after auditors highlighted ‘material uncertainty related to going concern.’ Frasers warned against a repeat scenario experienced by Debenhams, a business they described as having been driven into administration unnecessarily.
In compliance with UK takeover regulations, Frasers Group must formalise its bid or retreat by 28 October. Despite the rejection, Mulberry remains open to discussions with Frasers on a proportional basis, conditional upon agreed terms for its participation in the capital increase.
The situation remains dynamic as the deadline approaches, with strategic decisions poised to shape Mulberry’s trajectory.
