Mulberry rejects Frasers £83m offer as too low
British luxury brand Mulberry has rejected a possible takeover from minority shareholder Frasers Group on the grounds that it doesn’t recognise the company’s future value and will not lead the group back to profit.
On 30 September, Mulberry announced a subscription of new ordinary shares by Challice, the majority shareholder, to raise approximately £10m and a retail share offer designed to raise up to £750,000.
Mike Ashley’s Frasers Group said it was not aware of the subscription “until immediately prior to its announcement” and that the “total lack of engagement” was an “untenable position for Frasers and the other minority holders of Mulberry shares”.
It launched an indicative offer around 24 hours after hearing the subscription announcement.
The retail giant, which owns a 37 per cent stake in Mulberry, offered £83m for the rest of the luxury fashion brand, valuing each share at 130p. This was a premium of approximately 11 per cent to the closing share price on 27 September.
Mulberry told markets that this price “does not recognise the Company’s substantial future potential value” and that it has “no intention of withdrawing or terminating the [capital raise]”.
Part of the reason Mulberry launched the capital raise was because it has been struggling with weak demand, and reported a pre-tax loss of £34.1m in 2024, having made a pre-tax profit of £13.2m in 2023.
Mike Ashley’s group added that Mulberry’s “unabating difficulties” were part of the reason it announced the indicative bid.
“Frasers will not accept another Debenhams situation where a perfectly viable business is run into administration,” it said.