Frasers Group increased its shares in Mulberry shortly after a failed takeover attempt.
- The group subscribed to 4 million shares at 100p each through clawback provisions.
- Frasers owned 22.1 million shares prior, accounting for a near 37% stake.
- A rejected £83 million takeover bid prompted the share acquisition strategy.
- Mulberry, with backing from Challice, sees potential beyond the Frasers offer.
Frasers Group has recently augmented its stake in the luxury fashion retailer Mulberry, following its unsuccessful takeover bid. Just days after having its proposal declined, Frasers acquired an additional 4 million shares, utilising the clawback provisions accessible to major stakeholders. This acquisition was concluded at a fundraising price of 100p per share.
Prior to this transaction, Frasers Group, controlled by Mike Ashley, had possession of 22.1 million shares in Mulberry, which translated to an approximate 37% shareholding. The new purchase marginally elevates their holding beyond the previously held percentage, fortifying its position within the company’s share structure.
This move comes on the heels of Mulberry’s recent rejection of Frasers’ £83 million takeover proposal. The offer, equating to 130p per share, represented a 30% premium over the current trading price. However, Mulberry’s board, in consultation with its majority shareholder Challice and financial advisors, dismissed the offer on the grounds that it failed to adequately reflect the company’s substantial prospective worth.
Despite Frasers Group’s dissatisfaction with the refusal, Mulberry expressed willingness to collaborate with the FTSE 100-listed enterprise in subscribing to its shares. Mulberry has also reiterated its decision to proceed with its £10 million fundraising initiative, emphasizing confidence in its independent growth strategy.
The engagement of Challice in supporting Mulberry’s decision highlights the firm’s confidence in its ability to enhance its value independently of Frasers Group’s propositions. Mulberry remains optimistic about its future potential, as indicated by its majority stakeholder’s support and its active pursuit of strategic fundraising.
The strategic manoeuvres by Frasers and Mulberry underscore a dynamic interplay of ambitions between the two entities.
