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Highlights:
- Mulberry Group (LSE:MUL) rejects Frasers Group's (LSE:FRAS) 150p-per-share acquisition offer.
- Frasers initiated the bid following Challice’s involvement in a £10 million fundraising round.
- Frasers has until 28 October to submit a formal offer.
British luxury handbag maker Mulberry Group PLC (LSE:MUL) has rejected an acquisition bid from Frasers Group PLC (LSE:FRAS), the parent company of Sports Direct. Frasers, which already holds more than a third of Mulberry’s shares, sought to acquire the remaining shares at a premium price of 150p per share. The offer, made in response to Mulberry’s recent fundraising efforts, was turned down by the board, which deemed the proposal "untenable."
Frasers has made several attempts to engage with Mulberry over the acquisition but has expressed frustration with the company’s reluctance to entertain the proposal. Mulberry's board addressed the issue publicly today, stating that it found Frasers’ offer unviable. This move comes after Frasers’ initial bid, which followed news of Mulberry’s majority shareholder, Challice, entering into a £10 million equity fundraising round to bolster the company’s financial position.
Frasers’ approach to acquire Mulberry was seen as a reaction to Challice’s involvement in the capital raise, prompting Frasers to make its 150p-per-share offer. When Mulberry's board resisted the overtures, Frasers took its case directly to Challice, attempting to negotiate directly with the majority shareholder. However, Mulberry declined to comment on any direct discussions between Frasers and Challice, further signaling its desire to remain independent of Frasers’ attempts.
Mulberry reiterated its previous stance following Frasers’ initial approach, emphasizing its confidence in the company’s strategic direction and leadership. The board pointed to several key developments that it believes will secure the company’s future growth, including the recent appointment of a new CEO, securing a fresh debt facility, and the £10 million capital raise announced earlier. Mulberry’s board expressed its belief that these steps would place the company on a solid footing, allowing it to navigate current market challenges and capitalize on future opportunities for growth.
Frasers Group now faces a deadline of 28 October to make a formal offer for Mulberry if it intends to move forward with the acquisition. The deadline creates a sense of urgency for both parties, as Mulberry continues to reject Frasers' advances and focus on its internal strategy for growth and sustainability.
