Frasers Group, owning 37% of Mulberry, has made a bid for the troubled company, criticising it for insufficient financial communication.
- The bid arises after auditors highlighted serious financial uncertainties within Mulberry’s operations, causing concern for stakeholders.
- Frasers offers 130p per share, a 30% premium over Mulberry’s recent offer price, valuing the firm at £83m.
- Mulberry’s recent financial downturn includes an 18% sales drop, prompting plans to raise over £10m, largely unknown to Frasers.
- Frasers emphasises its commitment to Mulberry’s potential, despite challenges and a lack of engagement from current management.
Frasers Group, under the control of Mike Ashley, which already owns 37% of Mulberry shares, has tabled a cash offer for the embattled luxury retailer. This comes after concerns were raised regarding Mulberry’s financial health, as noted by their auditors who highlighted a ‘material uncertainty related to going concern’.
The offered price by Frasers stands at 130p per share, which is a substantial 30% increase on Mulberry’s own offer of 100p per share, valuing the business at approximately £83 million. This bid by Frasers represents an 11% increase over Mulberry’s closing share price on the 27th of September.
Frasers articulated its frustration over not being informed about Mulberry’s urgent need to secure additional funds amounting to over £10 million, which was only revealed on the eve of the announcement. Frasers stated that as a long-term investor, it would have considered underwriting the subscription potentially on more favourable terms for Mulberry.
Despite the challenges faced by Mulberry, which include an 18% plunge in sales amidst a slowdown in the luxury sector, Frasers Group insists on its capability and commitment to steer the brand back to profitability. Frasers pointed out that it possesses the necessary retail expertise and distribution capabilities to support Mulberry’s recovery.
Frasers remains particularly critical of Mulberry’s current management approach, drawing parallels to the administration of Debenhams, which it wishes to avoid. Given the lack of meaningful engagement from Mulberry, Frasers believes the current operational status is unsustainable for itself and other minority stakeholders.
In conclusion, Frasers Group positions itself as a committed investor with a strategic plan to revitalise Mulberry amidst ongoing financial challenges.
