Mulberry has rejected an £83 million takeover offer from Frasers Group, citing future value concerns.
- Challice, Mulberry’s majority shareholder, expressed no interest in backing the potential offer from Frasers Group.
- Frasers Group had proposed a cash offer of 130p per share, representing a 30% premium on the subscription price.
- Mulberry’s board claimed that the offer did not reflect the substantial future potential value of the company.
- Following the rejection, Mulberry’s share price rose to 121p, up from the previous closing of 118p.
In a significant business development, the British luxury brand Mulberry has declined an £83 million cash offer from Frasers Group. According to Mulberry, the decision was largely influenced by its majority shareholder, Challice, which clearly stated its disinterest in supporting the potential acquisition.
Frasers Group, which already holds 37% of Mulberry’s shares, made a cash offer of 130p per share. This offer was intended to be a 30% increase over the 100p subscription price during Mulberry’s retail offer and an 11% improvement on its last closed share price of 118p the previous Friday. However, Mulberry’s board stood firm, arguing that the proposal failed to consider the brand’s considerable future potential value, a pivotal factor in their rejection of the takeover.
The market reacted to this development when Mulberry’s share price experienced an uptick, trading at 121p following the announcement of the rejection. This marked a rise from the earlier 118p, indicating a positive investor response to Mulberry’s decision to maintain its current trajectory without the influence of Frasers Group.
Additionally, prior to the takeover bid, Mulberry had publicised its intention to raise £10 million by issuing new ordinary shares alongside a retail offer projected to reach up to £750,000. This strategy may have contributed to the board’s confidence in declining the Frasers Group offer, as it underscores a commitment to independent growth and financial reinforcement.
Mulberry’s rejection of Frasers Group’s offer underscores its commitment to independent growth and future potential value.
