Frasers Group has decided not to pursue the acquisition of Mulberry, ending weeks of ongoing speculation within the industry.
- Concerns over governance and leadership at Mulberry contributed to Frasers Group’s decision to halt acquisition plans.
- Despite increasing their offer from £83m to £111m, Mulberry rejected the takeover bid citing future potential value.
- Majority shareholder Challice’s lack of interest played a crucial role in the rejection of the offer.
- Frasers Group hopes for better engagement from Mulberry’s Board, given its significant shareholding.
On October 23, Frasers Group publicly announced its decision to abandon plans to acquire Mulberry, a major move that concluded several weeks of rampant speculation. The decision comes after careful consideration of various factors impacting Mulberry’s current and future standing in the competitive luxury accessories market.
Frasers had expressed significant concerns regarding the governance and leadership at Mulberry. These included an ‘apparent lack of a commercial plan against a backdrop of increasing market headwinds,’ which, according to Frasers, exacerbated the financial challenges Mulberry faces. These concerns were pivotal in Frasers’ decision-making process, steering them away from the acquisition.
The company, which already holds a substantial 37% stake in Mulberry, was disconcerted by the board’s decision to privately engage with majority shareholder Challice on critical matters, like the sudden £10m emergency subscription announced on September 27. Frasers emphasized its desire for a more transparent and inclusive approach moving forward, especially considering its significant investment and stake in Mulberry.
Mulberry’s rejection of the takeover was rooted in its confidence in its ‘substantial future potential value’ under new management. Despite an increased cash offer of £111m from Frasers, Mulberry, backed by Challice’s 56.4% stake, maintained its stance, viewing the timing of the sale as disadvantageous and unwanted.
Frasers now hopes for more constructive interactions with Mulberry’s board, including the appointment of a representative from Frasers to the Mulberry board, a proposal that has been tabled multiple times in recent discussions.
Frasers Group’s plan to acquire Mulberry has been shelved, shifting focus to future engagements.
