Majority shareholder of Mulberry turns down second takeover offer from Frasers Group
Frasers Group Expresses Concern Over Mulberry's Financial Situation
In a recent development, Frasers Group, a significant shareholder of luxury brand Mulberry, has expressed reservations about the funds Mulberry raised through a recent share subscription. The concerns were voiced in response to Mulberry's full-year fiscal results, which showed a pre-tax loss of £34 million, a stark contrast to the £13.2 million profit in 2023.
Mulberry announced a subscription for 10 million new ordinary shares in an attempt to raise £10 million, but Frasers Group believes that these funds may not be sufficient to support the business through the near to medium term. The group's statement comes without a current commercial plan or turnaround plan with Mulberry.
Frasers Group's concerns are not entirely new. In the past, they have made two offers to acquire Mulberry, the first for £83 million and the second, a revised offer of £111 million, both of which were rejected by the majority shareholder, Challice Limited.
The acquiring of Matches by Frasers Group was intended to bolster its luxury offerings, but the group was forced to place the retailer into administration in March, just nearly three months after the acquisition. This event may have contributed to Frasers' cautious approach towards Mulberry.
Mulberry's board, however, recognises Frasers as a committed and important investor. They believe that recent changes, such as the appointment of Andrea Baldo as CEO, provide a solid platform for a turnaround. The board is currently considering its position regarding the acquisition offer from Frasers Group and will make a further announcement in due course.
As of now, Frasers Group owns approximately 37% of Mulberry's issued share capital, and under the London Stock Exchange rules, they have until October 28 to either announce a firm intention to make an offer for Mulberry or announce that they do not intend to make an offer. If they fail to do so, the offer period will lapse.
Meanwhile, Richemont has sold Yoox Net-A-Porter for $610 million, and a recent acquisition by Frasers Group, Shein, has been reported. These events may influence Frasers' future strategies concerning Mulberry.
The situation remains uncertain, with no further commercial plan or turnaround plan with Mulberry stated by Frasers Group. The board of Mulberry, along with its advisers, continues to deliberate on the acquisition offer and will keep the public informed of any significant developments.
