Frasers Group has launched an acquisition bid valued at £83m for Mulberry, highlighting concerns over engagement and transparency.
- Mulberry recently announced a fundraising plan, seeking £10m through new shares issuance, raising eyebrows at Frasers Group.
- Frasers, owning 37% of Mulberry, was uninformed about the said fundraising efforts until shortly before the public announcement.
- Offering 130p a share, Frasers’ bid is a 30% premium on Mulberry’s new retail offer price, and a 11% increase over the recent share price.
- Mulberry faces financial hurdles, reporting a significant loss of £34.1m, urging stakeholders to reassess its operational strategy.
Frasers Group has made a strategic move by launching an £83m takeover bid for Mulberry, a prestigious luxury brand. This decision comes amid Frasers’ criticism towards Mulberry’s lack of communication regarding its recent fundraising initiative. The proposed acquisition underscores Frasers’ intent to prevent another scenario similar to Debenhams, where a potentially viable business was led into administration.
Mulberry recently unveiled plans to generate £10m through new ordinary shares and a retail offer capped at £750,000. Surprisingly, Frasers Group, which holds a 37% stake in Mulberry, indicated that it was made aware of these plans only immediately prior to their public disclosure. This lack of prior engagement has been perceived as a significant issue by Frasers.
The acquisition proposal from Frasers offers 130p per share, presenting a 30% premium over the 100p subscription rate linked to Mulberry’s recent fundraising offer. Furthermore, this proposed price represents an 11% uplift relative to Mulberry’s closing share price of 118p as of the preceding Friday.
Mulberry’s financial disclosures reveal a challenging fiscal landscape, with the company posting a pre-tax loss of £34.1m for the year. This marks a substantial reversal from a £13.2m profit the previous year, accompanied by a 4% dip in group revenue to £152.8m, attributed to a difficult latter half of the fiscal year.
Frasers Group expressed grave concerns regarding the ‘material uncertainty related to going concern’ noted in Mulberry’s latest annual report. Given its 37% shareholding, Frasers emphasised its unwillingness to accept a repeat of previous retail debacles, asserting the necessity for decisive action to safeguard stakeholder interests.
This acquisition attempt by Frasers underlines the necessity of addressing operational challenges at Mulberry to secure its future viability.
