Mulberry has rejected an £83 million takeover bid from Frasers Group, adding a new chapter to its strategic roadmap.
- The decision follows extensive consultation with its key stakeholder, Challice, which holds a significant 56.1% share in the company.
- Mulberry’s newly appointed CEO, Andrea Baldo, is anticipated to steer the brand towards stabilization and growth.
- Frasers Group expresses dissatisfaction with the lack of engagement from Mulberry amidst ongoing financial concerns.
- Under UK regulations, Frasers Group has until October 28 to either solidify its offer or step back for six months.
Recent events have seen Mulberry firmly dismiss an £83 million acquisition proposal from Frasers Group, a decision that underscores its confidence in its newly appointed leadership. Mulberry’s board discussed the offer with its majority shareholder, Challice, which notably owns 56.1% of the stake and is managed by Malaysian billionaire Ong Beng Seng and his wife, Christina. The company voiced assurance in their CEO, Andrea Baldo, emphasizing his role in providing a ‘solid platform’ for recovery, which they believe will deliver optimal shareholder value.
Following the rejection of Frasers Group’s offer, which was set at a 130p-per-share rate, reflecting an 11% premium over the previous closing price, Mulberry’s shares saw a rise of 4.8% to 130p. Frasers Group had articulated itself as the ‘best steward’ poised to restore Mulberry’s financial health, citing concerns about its current fiscal stability. They referenced the company’s auditor’s commentary on the ‘material uncertainty’ surrounding Mulberry’s ability to sustain itself as a viable business entity.
Frasers Group’s discontent was compounded by the timing of Mulberry’s £10 million rights issue announcement, with Frasers labeling the engagement strategy as ‘untenable’ for itself and other minority shareholders. Mulberry aims to channel the new funds into stabilizing its finances and enabling Andrea Baldo to execute his business strategy.
Under the UK’s takeover regulations, Frasers Group is now faced with a deadline of 5 pm on October 28 to either place a definitive offer or withdraw. Choosing to withdraw will mean Frasers cannot make another bid for six months unless another contender emerges.
The unfolding scenario between Mulberry and Frasers Group highlights strategic maneuvering inherent in high-stakes corporate governance.
