Frasers Group, owner of Sports Direct, has decided not to proceed with its acquisition of Mulberry, closing a chapter of speculation.
- The decision stems from governance and leadership concerns within Mulberry, as well as financial instability in the current market.
- Frasers Group holds a 37% share in Mulberry and seeks more engagement from its Board, especially on board appointments.
- An initial £83m offer was rejected by Mulberry, which believes in its future value and lacks interest from its majority shareholder Challice.
- Despite increasing the offer to £111m, Frasers Group’s proposal was declined, with Challice seeing the timing as inopportune.
Frasers Group, the company behind well-known names such as Sports Direct and Flannels, recently declared its intention to halt its pursuit of acquiring Mulberry. After much speculation, this move concludes weeks of discussions surrounding the potential deal.
Concerns have been raised by Frasers Group regarding the governance and leadership of Mulberry. The company has criticised Mulberry’s leadership team for a perceived lack of a commercial strategy amidst challenging market conditions and the precarious financial state Mulberry currently faces.
Holding a significant 37% stake in Mulberry, Frasers Group has expressed a desire for better engagement with the Mulberry Board. The company has emphasised its interest in contributing positively by appointing a Frasers representative to Mulberry’s Board, a request that has been made on several occasions.
On 1 October, Mulberry rejected an £83 million proposal from Frasers Group. The rejection was based on Mulberry’s confidence in its substantial future value under new leadership, along with Challice, the majority shareholder, showing no interest in pursuing the offer.
In an effort to secure the acquisition, Frasers Group increased its proposal to £111 million. However, Challice, owning a 56.4% stake in Mulberry, maintained its stance, indicating that the timing was unsuitable for a sale and expressing regret over the distraction caused by the possible offer.
The withdrawal marks a decisive end to the acquisition discussions, reflecting strategic differences between the companies.
