Frasers abandons its £111m takeover bid for luxury brand Mulberry, citing lack of board engagement.
- Mulberry’s board rejects Frasers’ improved 150p-per-share offer, prioritizing business performance.
- Frasers demands a “credible” plan from Mulberry amid governance concerns over Challice’s control.
- Sports Direct owner seeks board representation at Mulberry to influence strategic direction.
- Mulberry shares fall 7% after Frasers withdraws takeover proposal amidst luxury market slowdown.
Frasers Group has made the decision to abandon its ambitious £111 million takeover offer for the renowned luxury handbag maker, Mulberry. This decision follows the Mulberry board’s dismissal of Frasers’ enhanced proposal, with the board showing a preference to focus on fortifying its business performance instead. The lack of engagement from Mulberry’s board prompted Frasers to refrain from making a definitive offer.
Mulberry, headquartered in Somerset, witnessed a 7% drop in shares following Frasers’ announcement. This was further compounded by Mulberry’s rejection of Frasers’ more lucrative 150p-per-share proposal. Frasers articulated its need for Mulberry to propose a ‘credible’ plan promptly and highlighted concerns regarding the governance, given that Challice—a company steered by Christina Ong and Ong Beng Seng—holds the majority ownership of the fashion firm.
Frasers Group, already holding a 37% stake in Mulberry, has expressed its desire for a voice in the company’s boardroom. The sports retail giant remains persistent in its efforts to appoint a representative to Mulberry’s board and remains hopeful for more comprehensive interactions with Mulberry and Challice on significant matters. Despite Mulberry’s dismissal of the bid, Frasers emphasizes its enduring support for the brand.
Amidst the backdrop of a declining luxury consumer market due to inflationary pressures impacting affluent buyers, Mulberry’s shares have plummeted by more than 40% over the past year. Frasers continues to stress the need for a strategic path forward from Mulberry to navigate these challenging market conditions effectively.
Frasers’ withdrawal from the takeover pursuit underscores its issues with the current governance framework and commercial strategy at Mulberry. The firm remains keen on ensuring that Mulberry does not find itself in a precarious position again, similar to the situation during the emergency subscription announcement on September 27. With its significant shareholding, Frasers anticipates positive engagement regarding its board appointment request, made persistently in recent times.
Frasers remains a committed stakeholder, urging Mulberry towards a credible strategic vision amidst market challenges.
