The proposed acquisition of Mulberry by Frasers Group has been firmly rebuffed. The luxury brand’s majority shareholder, Challice, expressed disinterest in the bid.
- Mulberry’s board found the offer undervalued their substantial future potential.
- Frasers Group had proposed a 130p per share cash offer, a notable premium on previous prices.
- Following the rejection, Mulberry’s share price showed a slight increase, trading at 121p.
- Prior to rejecting the offer, Mulberry announced a plan to raise additional capital through new shares.
In a significant move, the acquisition proposal by Frasers Group, at a sum of £83 million, has been turned down by the British luxury brand Mulberry. The reluctance to proceed with the bid was primarily voiced by Mulberry’s majority stakeholder, Challice, who displayed no interest in supporting the potential offer, thus quashing the attempt to consolidate control.
Mulberry’s board articulated their standpoint clearly, stating that the proposed bid by Frasers Group failed to acknowledge the firm’s considerable future value potential. This assertion underscores Mulberry’s confidence in its strategic direction and growth trajectory, setting the stage for possible future achievements independent of Frasers’ involvement.
The bid from Frasers Group, which already holds 37% of Mulberry shares, suggested a cash payment of 130p per share. This proposal represented a 30% premium over the previous subscription price of 100p during Mulberry’s retail offering and was 11% above their recent closing price of 118p. Despite these seemingly attractive terms, the offer wasn’t sufficient to sway Mulberry’s leadership.
Immediately following the public refusal of Frasers Group’s offer, Mulberry saw a minor uptick in their share price, reaching 121p. This market movement reflects a level of investor confidence in Mulberry’s independent strategy post-rejection, albeit modest.
In tandem with the bid proceedings, Mulberry had previously revealed intentions to bolster its financial standing by generating £10 million through the issuance of new ordinary shares. This initiative, including a retail offer of up to £750,000, highlights Mulberry’s proactive measures to fortify its balance sheet and fuel future growth initiatives.
Mulberry’s firm stance against Frasers Group’s offer highlights its confidence in future growth.
