Mulberry Dismisses Frasers' Takeover Proposal

Luxury fashion brand Mulberry Group plc (LON:MUL) has rejected a revised takeover proposal from Frasers Group plc (LON:FRAS), deeming it "untenable". The company plans to concentrate on its operations and growth plans instead.

In a statement released on Tuesday, Mulberry addressed Frasers' unsolicited offer of 150 pence per share for the stock it does not already own.

Frasers, run by retail magnate Mike Ashley, made this revised cash offer on October 11, 2024, as part of its strategy to gain greater control over Mulberry.

Mulberry confirmed that the proposal was thoroughly evaluated with input from its advisers, but stated that Challice Limited, its majority shareholder with a 56.4% stake, firmly opposes the bid. On October 13, Challice publicly declared it would not sell any shares to Frasers or support the offer, effectively obstructing a full acquisition.

Given Challice's opposition and its own strategic goals, Mulberry sees no reason to pursue Frasers' offer. The company stated, "The Company should focus its attention on driving the commercial performance of the business."

Mulberry expressed confidence that the new CEO appointment, along with a new debt facility and recently announced capital raising, will position the Group for future growth.

Frasers responded on October 18 by announcing it had reached out to Challice directly to explore potential avenues. Mulberry’s board, however, declined to comment on any interactions between the two parties.

Frasers faces a deadline of October 28, 2024, to either submit a formal takeover offer or withdraw, in compliance with UK takeover regulations. Any extension would require approval from the Takeover Panel, and Mulberry cautioned that there’s no certainty Frasers will proceed with a formal offer.