Mulberry has rejected a potential £83m takeover offer from Frasers Group, following a bid by the Mike Ashley-controlled company for the embattled luxury fashion retailer.
Frasers proposed a cash offer of 130p per share for Mulberry yesterday (30 September), which values the luxury retailer at £83m – a 30% premium on its recent share price.
However, after consulting with financial advisers and its majority shareholder Challice, the Mulberry board concluded that Frasers’ offer “does not recognise the company’s substantial future potential value”.
Challice, which holds a 56.1% stake in Mulberry, also voiced its support for the current turnaround strategy, led by new CEO Andrea Baldo who joined this July.
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In light of this, Mulberry’s board has rejected the offer and will proceed with its plans to raise over £10m in cash.
The board noted that the capital raising would provide all shareholders with the opportunity to participate in the company’s recovery efforts on equal terms.
Frasers, which owns 37% of Mulberry’s shares, expressed concerns about the retailer’s future after its auditors flagged “material uncertainty related to going concern” on Friday.
The group said it would “not accept another Debenhams situation where a perfectly viable business is run into administration”.
Frasers now has until 28 October to announce a firm offer or walk away, under UK takeover rules.
The Mulberry board said it remains open to engaging with Frasers on a pro-rata basis for its share in the capital raise.
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