Mulberry has refused an £83 million takeover bid from Frasers Group, emphasising its potential future value.
- The Somerset-based fashion brand is determined to follow its capital raising plans to ensure shareholder interests.
- Majority stakeholder, Chalice, concurs with Mulberry’s direction, supporting the company’s new CEO for a turnaround.
- Frasers Group owns 37% of Mulberry and proposed an additional 130p per share to acquire further stakes.
- Mulberry, established in Somerset, has faced financial challenges due to reduced consumer spending.
The luxury handbag retailer Mulberry has officially turned down an £83 million acquisition bid proposed by Frasers Group, a decision underscored by its confidence in the brand’s inherent future value. Mulberry’s leadership believes that the offer presented by Frasers Group, which was disclosed earlier this week, fails to acknowledge the company’s substantial potential worth.
In its interaction with Chalice, its dominant shareholder helmed by Ong Beng Seng and his wife, Christina, Mulberry has secured backing for its existing strategy. The company remains unwavering in its capital-raising plans, seeing this as a pivotal step towards restructuring and ultimately delivering optimal returns to its shareholders.
The company’s new chief executive, Andrea Baldo, has been entrusted with steering this transformation. Mulberry reiterated its commitment to a capital-raising strategy as announced on 27 September 2024, intended to allow equitable participation from all shareholders. This approach is deemed essential for acquiring additional equity funding in a fair and efficient manner.
Although the Frasers Group has a significant 37% stake in the company, they had expressed willingness to further underwrite the capital raising subscription. Mulberry’s board, however, is keen on engaging Frasers regarding potential proportional involvement in the capital raising initiative, signalling open channels for future collaboration.
Rooted in Somerset since its inception by Roger Saul in 1971, Mulberry has faced hurdles primarily due to a tightening in consumer spending power. Recent financial disclosures have highlighted a downturn, with the company reporting an annual pre-tax loss amounting to £34.1 million, a stark contrast to its previous year’s profit of £13.2 million.
Mulberry remains firm in its commitment to its capital raising plans, prioritising long-term shareholder value over immediate acquisition offers.
