Correction: This article has been updated to reflect the position of Mulberry’s board and majority shareholders.
Dive Brief:
- The majority shareholder of U.K.-based luxury fashion brand Mulberry has rejected a second and revised acquisition offer from Frasers Group, according to a Monday statement.
- Frasers, a minority shareholder in the company, owns approximately 37% of Mulberry’s issued share capital. On Oct. 11, Frasers offered 111 million pounds, or about $14.4 million, in its second bid to acquire the remaining shares from majority owner Challice Limited, which owns 56.4% of the company.
- Mulberry’s board said in a statement that it is considering its position, and cited an Oct. 13 statement from Challice that said it “has no interest in either selling its Mulberry Shares to Frasers or providing Frasers with any irrevocable or other undertaking.”
Dive Insight:
This is the second attempt from Frasers to acquire a majority stake in Mulberry.
On Sept. 30, Frasers offered 83 million pounds to take over the brand. In a statement rejecting that bid, Mulberry’s board said it recognized “that Frasers is a committed and important investor in Mulberry,” but said recent moves including the appointment of Andrea Baldo as CEO provide the company “with a solid platform to execute a turnaround and, ultimately, to deliver best value for all Mulberry shareholders.”
In its revised Oct. 11 offer, Frasers said it had “significant reservations” that the funds Mulberry raised under its recent subscription offer would “be enough to support the business through the near to medium term.” Frasers added that it believed “this will lead likely to another capitalisation event within that timeframe unless there is immediate and very real change at the Company.”
Frasers also said it had “considered the Rejection Statement along with the limited engagement it has been able to arrange with representatives of Mulberry following the Initial Proposal,” and said that “there is no current commercial plan, turnaround or otherwise.”
Meanwhile, Mulberry’s board said on Monday that it’s “working with advisers to consider the Company’s position” and that a further announcement will be made “in due course.”
Frasers has until Oct. 28 to either announce a firm intention to make an offer for Mulberry or announce that it does not intend to make an offer for Mulberry, in accordance with the London Stock Exchange rules.
In its full-year fiscal results released Sept. 27, Mulberry announced a subscription for 10 million new ordinary shares in an effort to raise gross proceeds of 10 million pounds. The company additionally reported that group revenue for the year ending March 30 was down 4%, with a pre-tax loss of 34 million pounds, compared to a pre-tax profit of 13.2 million pounds in 2023.
Frasers Group has seen recent challenges when it comes to acquisitions. The company was forced to place retailer Matches into administration in March, nearly three months after acquiring the company. At the time of the acquisition, Frasers said the deal would help strengthen its luxury offerings.
