Mulberry stated in an update published on 22 October that its board has considered the clear position of its majority shareholder Challice, which holds a 56% stake, regarding Frasers‘ potential offer of 150 pence per Mulberry share.
The board indicated that Challice has “no interest in selling to Frasers” or supporting the possible offer.
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After consulting with its advisers, the board unanimously decided that the potential offer was “untenable” and the company should focus on driving its “commercial performance.”
Why has Mulberry rejected Frasers’ offer?
The board reiterated its earlier statement made during the announcement of Mulberry’s audited results on 27 September 2024, which said: “We believe that the combination of the appointment of a new CEO, our new debt facility and the capital raising announced today will put the group on a firm footing to ensure we are well set up for future growth.”
GlobalData’s retail analyst Alice Price says it’s clear Mulberry has confidence in its new CEO and believes its debt facility and capital raising “will be enough to execute a turnaround of the business”.
She also suggests Mulberry’s resistance to Fraser’s offer “no doubt stems from Fraser’s lack of experience in the luxury sector”.
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By GlobalDataPrice points out Frasers Group’s decision to shutter luxury marketplace Matches Fashion just three months after acquiring it — due to underestimating the investment and time required for a turnaround — has not helped its cause for acquiring Mulberry.
Mulberry’s position on Frasers’ revised offer
Mulberry’s board acknowledged Frasers’ support for Mulberry’s brand value through its involvement in the recent fundraising and expressed its appreciation, stating it “looks forward to further interactions with Frasers in the future.”
Additionally, it mentioned that on 18 October 2024, Frasers announced its intention to engage directly with Challice, adding: “For the avoidance of doubt, the board is not commenting upon any such direct engagement.”
A deadline on Frasers’ offer
Mulberry explained that in accordance with Rule 2.6(a) of the Code, Frasers must announce its intention regarding an offer for Mulberry by 5:00 p.m. (London time) on 28 October 2024, unless the Takeover Panel agrees to extend this deadline.
The luxury brand emphasised that this announcement must “either confirm” a firm intention to make an offer, per Rule 2.7, or state that Frasers “does not plan to make an offer,” which would be subject to Rule 2.8. The deadline will only be extended with the consent of the Panel under Rule 2.6(c) of the Code.
The board highlighted that there is “no certainty” that an offer will be made for Mulberry.
This announcement follows Mulberry’s rejection of the initial bid made by Frasers, citing that the offer was “too low” and “did not recognise” the luxury brand’s future value.
Frasers Group declined Just Style’s request for comment and Mulberry had not responded to Just Style’s request at the time of going to press.
