Mulberry, the distinguished fashion brand, has resolutely rejected an £83m takeover approach from Mike Ashley’s Frasers Group.
- Mulberry believes the offer undervalues its future potential and is committed to a capital raise.
- The company is putting its trust in CEO Andrea Baldo to spearhead a turnaround strategy.
- Frasers Group is acknowledged as a significant stakeholder, having already acquired a 37% interest in Mulberry.
- Despite financial challenges and losses reported in the past year, Mulberry remains focused on long-term shareholder value.
Luxury handbag maker Mulberry has rejected an £83m acquisition proposal from Mike Ashley’s Frasers Group. The company, based in Somerset, views the offer as failing to reflect Mulberry’s significant future potential. The company’s board is determined to adhere to its capital raising strategy, which it believes provides a robust foundation for a successful turnaround.
Mulberry has engaged with its majority shareholder, the Singapore-based Chalice, controlled by billionaire Ong Beng Seng and his wife Christina, regarding the takeover bid. The board has expressed its resolve to maintain the subscription and retail offer announced on September 27, 2024. This approach is deemed the most equitable way for shareholders to gain further equity funding.
Andrea Baldo, the recently appointed CEO, is at the forefront of Mulberry’s revitalization efforts. The company’s strategy is grounded in bolstering its capital framework and ensuring maximum shareholder value. There is no intention from the board to rescind the current capital raising plans.
Frasers Group, the owner of Sports Direct, and a noteworthy investor in Mulberry with a 37% stake, proposed an offer of 130p per share. This bid values the remaining stake it does not own at approximately £52.4m. Despite acknowledging Frasers as a crucial investor, the board is poised to engage in discussions about potential participation in the subscription on a pro rata basis.
The challenges faced by Mulberry, including a reduction in consumer expenditure, have resulted in a pre-tax loss of £34.1m for the latest financial year. This is a stark contrast to the £13.2m profit recorded in the preceding year. Nevertheless, Mulberry is unwavering in its commitment to a strategic turnaround, drawing on its rich heritage and brand identity established since its founding in 1971.
Mulberry steadfastly rejects the Frasers Group’s bid while pursuing a transformative course focused on capital growth and shareholder value.
