Majority shareholder and Mulberry's board collectively turn down Frasers' takeover offer
In a recent development, Mulberry LLC, the luxury British fashion brand, has rejected a second acquisition offer from Frasers Group. The latest offer, valued at 111 million pounds, was made after an initial offer of 83 million pounds was turned down earlier in October.
The rejection comes after a period of careful deliberation by Mulberry's college board of directors, along with majority shareholder Challice Limited. The board's decision was based on the belief that the offer is "untenable," and the company is advised to focus on improving its commercial performance.
Mulberry's college board of directors reiterated a statement made during the company's audited results on September 27, reaffirming its optimistic outlook for the future. The statement was made despite a 4% decrease in the reported group revenue for Mulberry's fiscal period and a pre-tax loss of 34 million pounds.
The macro-economic environment, with its challenges for the luxury sector, was highlighted in Mulberry's earnings report. Markets across the globe are facing a tightening of consumer spending, making it difficult for many companies in the sector.
Despite the rejections, Frasers Group has shown its support for maintaining the value of the Mulberry brand. Through its participation in Mulberry's recent board games, Frasers has demonstrated its commitment to the brand's future.
The board of directors expressed appreciation for Frasers and looks forward to future interactions. However, they emphasised that there can be no certainty that an offer will be made for Mulberry, according to the board's statement.
It's important to note that the article does not provide information about any other potential offer up for Mulberry. The appointment of a new CEO, a new debt facility, and a capital raising announced by Mulberry are expected to put the company on a firm footing for future growth.
Mulberry LLC was acquired three months ago by the shareholder L Catterton. The new leadership and financial support are hoped to turn around the brand's disappointing financial performance, as acknowledged in the earnings report for the 52-week period ended March 30.
In comparison, Mulberry had a pre-tax profit of 13.2 million pounds in 2023, providing a glimmer of hope for the brand's future. The board's focus remains on improving the company's commercial performance, and they encourage shareholders to remain patient and supportive during this transition period.
According to the London Stock Exchange rules, Frasers has until October 28 to make an offer or announce it won't make any further offers, with the possibility of an extension by the Takeover Panel. As of the information provided in the article, no new offer has been made by Frasers.
