Mulberry’s largest shareholder, Challice, has rejected Frasers’ revised takeover bid, indicating it as an ‘unwanted distraction.’
- The rejection follows Frasers’ increased offer from 130p to 150p per share, which was still deemed unacceptable.
- Challice, with a 56.1% stake in Mulberry, maintains its firm stance, complicating Frasers’ attempt to gain majority control.
- Mulberry is steering towards recovery with a new CEO and strategic financial measures despite market challenges.
- Frasers is under a deadline of October 28 to make a formal offer or cease its takeover attempt.
Mulberry’s largest shareholder, Challice, has firmly rejected a revised takeover bid from Frasers, labeling it as an ‘unwanted distraction.’ The decision was made as Mulberry continues to focus on recovering from severe financial challenges. The bid, initially proposed at 130p per share, was raised to 150p in Frasers’ attempt to gain stronger traction. However, Challice has made it clear that the revised offer is still not in Mulberry’s best interest.
Challice holds a significant 56.1% stake in Mulberry, giving it substantial influence over any potential takeover. This power balance means Frasers, already owning 36.8% of Mulberry, could struggle significantly to gain control without Challice’s consent. The Singaporean billionaires Ong Beng Seng and Christina Ong, who control Challice, see Frasers’ bid as inopportune, possibly hindering Mulberry’s strategic management plans.
Despite a recent pre-tax loss of £34 million, Mulberry remains confident in its recovery strategy. This is evident through the appointment of Andrea Baldo as the new CEO and a £10.75 million share placing aimed at stabilizing its business operations. Mulberry’s iconic reputation in the luxury market, embodied by its Bayswater handbags, is a cornerstone of its ambition to reclaim financial stability.
Frasers maintains that it could potentially steer Mulberry back to profitability, avoiding another situation reminiscent of Debenhams’ collapse. But as the deadline approaches on October 28, firm actions are demanded. Frasers faces a crucial decision: make a formal offer or abandon its takeover ambitions. The outcome hinges heavily on strategic thinking and response from key stakeholders.
Without backing from its major shareholder, Mulberry continues with its strategic recovery plan, while Frasers must decide whether to proceed with a formal offer.
