Mulberry, a luxury brand known for its iconic Bayswater handbags, recently rejected a revised takeover bid from Frasers Group, describing it as an ‘unwanted distraction’.
- Challice, the major shareholder in Mulberry, has no intention of selling its stakes to Frasers.
- Frasers raised their offer to 150p per share after the initial proposal was declined.
- Challice’s stance indicates Frasers’ challenge in gaining majority control over Mulberry is formidable.
- Frasers faces a deadline to make a firm offer by October 28 or withdraw.
Mulberry has firmly declined a revised takeover bid from Frasers Group, dismissing it as an ‘unwanted distraction’ amid its efforts to overcome financial hurdles. Challice, which owns a 56.1% stake in Mulberry, remains resolute in its decision not to sell, a stance stemming from the Singaporean billionaires Ong Beng Seng and Christina Ong who control Challice.
Frasers Group, led by Mike Ashley, increased its offer to 150p per share following the rejection of an initial 130p per share bid. Despite already owning 36.8% of Mulberry, Frasers is unlikely to secure a controlling interest without Challice’s approval. The Ongs specifically labeled the bid as ‘inopportune’, emphasizing it disrupts the brand’s current management strategies as it navigates through a turnaround phase.
The renowned British brand, famous for its Bayswater handbags, reported a substantial £34 million pre-tax loss and declining sales, emblematic of the broader challenges within the global luxury market. In pursuit of recovery, Mulberry remains optimistic about its trajectory, citing the appointment of new CEO Andrea Baldo and a strategic £10.75 million share placement to stabilize operations.
Frasers, conversely, believes in its ability to revitalize Mulberry’s profitability. The group insists on averting what it refers to as ‘another Debenhams situation’, a reference to previous retail failures. However, with Challice’s firm opposition, the likelihood of a takeover appears diminished if a decisive offer is not made by the October 28 deadline.
Mulberry’s rejection of Frasers’ takeover bid showcases its commitment to maintaining control and implementing its recovery plan independently.
