The luxury brand Mulberry has turned down a £111 million takeover proposal from Frasers Group amid rising tensions between key stakeholders. The bid was an increased offer from an initial £83 million, aiming to acquire shares not already owned by Frasers Group.
- Mulberry’s board, after consulting its advisors, unanimously found the offer untenable, preferring to concentrate on boosting the company’s commercial operations.
- Challice, Mulberry’s major shareholder, expressed no interest in selling its shares to Frasers or committing to any offer agreements.
- Frasers Group, led by the owner of Flannels, has until 28 October to formalise or withdraw its acquisition intentions.
- A strategic focus on Mulberry’s growth includes appointing a new CEO, securing debt facilities, and capital infusion, ignoring the takeover proposition.
Mulberry, a prominent name in the luxury fashion sector, has refused an increased acquisition bid from Frasers Group, which surged from £83 million to £111 million, striving to acquire shares it does not already control. This development escalates existing tensions between Mulberry’s main shareholder, Challice, and Frasers, owner of the high-end retailer Flannels.
The decision came after Mulberry’s board, in consultation with its advisers, concluded that the bid was untenable. The board emphasised its intention to focus on enhancing the company’s commercial prowess rather than entertaining the acquisition offer. This stance reflects Mulberry’s strategic vision to bolster its market position independently, relying on internal resources and leadership initiatives.
Challice, which holds a significant share of Mulberry, categorically dismissed the idea of selling its shares to Frasers Group. In a firm statement, Challice declared they would not engage in any irrevocable commitments regarding the potential offer, underscoring a strong preference for maintaining their current stake.
The clock is ticking for Frasers Group, which is facing a deadline of 28 October to either solidify its acquisition bid or declare its intention to desist. This critical juncture presents Frasers with pressing choices about its investment strategy and future ambitions concerning Mulberry.
Meanwhile, Mulberry is directing its vision towards growth and stability, highlighted by its recent actions such as appointing a new Chief Executive Officer, finalising a new debt facility, and announcing a capital increase. These steps are aimed at fortifying its financial footing, thereby positioning itself favourably for future growth independent of external takeover attempts.
Mulberry’s firm decision to focus on internal growth strategies underscores its commitment to maintaining independence and enhancing its market position.