In a decisive move, Mulberry has declined an £83 million takeover bid from Frasers Group.
The board, alongside its majority shareholder Challice, believes in the strategic vision of newly appointed CEO Andrea Baldo.
Mulberry has announced its rejection of a takeover offer from Frasers Group worth £83 million. This decision was taken after consulting with Challice, its majority shareholder, which controls 56.1% of the company.
The rejection follows a detailed evaluation, reflecting confidence in the potential turnaround under the new leadership of CEO Andrea Baldo.
Andrea Baldo, recently appointed as CEO, is seen as a key factor in Mulberry’s decision-making process. The board believes Baldo provides a ‘solid platform’ for the company’s turnaround strategy.
Following the announcement, Mulberry’s shares experienced a 4.8% rise, reaching 130p. This increase demonstrates market confidence in the board’s decision.
Frasers Group, which made the 130p-per-share bid after a £10 million rights issue, has not yet responded to Mulberry’s rejection.
The bid represented an 11% premium to the previous closing price.
The sportswear retail giant expressed its belief that it was the ‘best steward’ to steer Mulberry back to profitability, citing the brand’s ongoing financial difficulties.
Frasers Group has voiced concerns regarding Mulberry’s financial stability. The company’s auditor highlighted ‘material uncertainty’ about its ability to continue as a going concern.
Frasers also criticised the timing of Mulberry’s rights issue, labelling the lack of engagement with minority shareholders as ‘untenable’.
Despite these concerns, Mulberry has reported a £34 million pre-tax loss, signalling significant challenges ahead. The capital raised from the rights issue is intended to stabilise Mulberry’s balance sheet.
This financial strategy is crucial for enabling Andrea Baldo to implement his vision for turning the brand around.
Under UK takeover rules, Frasers Group has until 28 October to make a firm offer or step back.
Mulberry’s shares surged by 4.8% following the announcement of the rejected bid.
This reaction indicates growing investor confidence in the new leadership and the strategic direction of the company.
The immediate future of Mulberry depends on the strategic actions and decisions of its new CEO, Andrea Baldo.
Mulberry’s rejection of the bid underscores its faith in its new leadership and strategic plan.
As the deadline for Frasers Group’s response looms, stakeholders will be watching closely for the next developments.
