Frasers Group has confirmed it will no longer pursue a takeover of Mulberry, citing governance concerns after the luxury handbag retailer’s board unanimously rejected its latest offer.
The Sports Direct owner, which holds a 37% stake in the luxury retailer, had submitted a revised cash bid earlier this month, offering 150p per share for the remaining shares it does not already own, valuing the business £111m.
But Mulberry’s board deemed the offer “untenable” after majority shareholder Challice, which owns 56%, said it had “no interest in either selling its Mulberry shares to Frasers or providing Frasers with any irrevocable or other undertaking with regards the possible offer.”
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In a statement, Frasers described the decision as a “disappointing outcome” but reaffirmed its long-term support for the well-loved British brand.
The Sports Direct owner added that it has “become increasingly concerned over the governance of Mulberry, the apparent lack of a commercial plan against a backdrop of increasing market headwinds, and critically, the financial position in which Mulberry currently finds itself”.
The group also said “it would not like to see another scenario where the board chooses to exclusively engage with Challice in private on significant matters, such as the emergency subscription of £10m” which was announced last month.
Despite dropping its bid, the group has called for the appointment of a Frasers representative to the Mulberry board.
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