Mulberry has turned down an increased acquisition offer from Frasers Group, citing lack of interest from its major shareholder.
- Frasers Group increased their bid to £111 million, up from an earlier offer of £83 million.
- Major shareholder Challice, with 56% ownership, expressed no interest in selling their shares to Frasers Group.
- Frasers Group owns 37% of Mulberry, but requires Challice’s support for a complete takeover.
- Challice remains supportive of Mulberry’s current management and strategic direction.
Mulberry, a prominent luxury handbag retailer, recently turned down a revised acquisition proposal from Frasers Group, valuing the company at £111 million. This decision came in light of statements from Challice, the major shareholder holding a 56% stake, indicating no intent to divest its shares to Frasers Group or to provide any agreements in favour of the offer.
Following an initial proposal amounting to £83 million, Frasers Group escalated their bid to 150p a share. Despite this increase, Challice’s firm stance significantly impacts the potential for a takeover, as they firmly stated their non-interest in selling and highlighted their backing of Mulberry’s existing management strategy.
Frasers Group currently owns 37% of Mulberry’s shares and actively participated in a recent fundraising initiative, acquiring £3.9 million in new shares. However, without Challice’s acquiescence, a complete acquisition remains improbable. Challice has made it clear that a takeover without their endorsement cannot proceed.
The board of Mulberry has shown continued confidence in its future trajectory, citing the recent appointment of CEO Andrea Baldo and a successful £10.75 million capital raise as critical elements reinforcing its turnaround strategy. Challice echoed their support, stressing the timing as inappropriate for a sale and voicing concerns over the potential distraction from operational objectives due to acquisition discussions.
In conclusion, Mulberry’s rejection of Frasers Group’s offer reflects the strategic alignment and long-term investment confidence from its primary shareholders, ensuring stability and continuity in management.
Mulberry’s firm rejection underscores its strategic resolve and commitment to its management’s vision.
