Mulberry rejects Frasers Group takeover bid

Luxury brand Mulberry has said that it has rejected a takeover bid made by Frasers Group after consulting with the company’s 56.1 percent shareholder, Challice Limited.

Frasers, which currently holds 36.8 percent of Mulberry’s shares, made an offer on September 30 to purchase the entire issued and to be issued share capital of the brand that it doesn’t yet own for 130 pence per share, amounting to 83 million pounds.

It did so on the back of Mulberry’s FY24 financial report, in which the brand reported that it had swung to a loss and noted that there was a “material uncertainty going concern”.

This prompted Frasers to express doubt over the label’s future, adding in its Proposed Offer announcement that it would “not accept another Debenhams situation where a perfectly viable business is run into administration”.

Offer did not recognise 'substantial future potential value'

Frasers also deemed Mulberry’s new Capital Raising initiative, made up of a subscription of new ordinary shares and a Retail Offer, “wholly unsatisfactory” as a response to the lacklustre financial performance, thus feeling a takeover would be necessary in order to return the brand to profitability.

Mulberry has set out to raise around 10 million pounds through the Capital Raising, a process it continued to stand by in its rejection announcement, where it stated that the strategy would provide the company “with a solid platform to executive a turnaround and, ultimately, to deliver best value for all Mulberry shareholders”.

Mulberry added that the possible offer did not recognise its “substantial future potential value” and that Challice, its majority shareholder, had “no interest in supporting the possible offer”.

As a result of Frasers’ announcement, however, the British brand is now considered to be in an “offer period”, yet there is no certainty that an offer will be made, the announcement concluded.