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Frasers Group, led by Mike Ashley, has confirmed it will not pursue a bid for Mulberry, after the iconic British luxury brand rejected its two previous cash offers earlier this month.
The first bid, launched on 1 October at £83m, was dismissed by Mulberry as undervaluing the brand. A subsequent offer on 10 October at £111m, proposing to acquire the remaining shares at 150 pence per share, was rebuffed by Frasers yesterday as “untenable.”
The stabs at a takeover stemmed partly from Frasers’ exclusion from a recent capital raise, despite later participating, coupled with what it termed Mulberry’s “unabating difficulties”.
But, in a statement today, Frasers said it is choosing to end the offer period “in the absence of proper engagement from the Mulberry Board”.
The company, which owns Sports Direct, reiterated its “long-term” support for Mulberry but said there is an urgent need for a credible business strategy from management.
It said it has grown “increasingly concerned over the governance of Mulberry, the apparent lack of a commercial plan against a backdrop of increasing market headwinds, and critically, the financial position in which Mulberry currently finds itself.”
Mulberry could not immediately be reached for comment. The stock slid down around 3.5 per cent on Wednesday afternoon at close, which AJ Bell’s Danni Hewson suggested may show that “many investors will want the company to show its strategic hand quickly.”
Frasers, which is a major Mulberry shareholder with a 37 per cent stake, added that the outcome is “disappointing” and it hopes the company will “engage positively” on a Frasers appointee to the Mulberry Board.
It was also angered by Mulberry’s exclusive dealings with other majority owner Challice in recent financial decisions, for example the emergency subscription of £10m announced in September. Challice, which owns 56.4 per cent of Mulberry, opposed Frasers’s bid.
In September, Mulberry announced a slide in profit – reporting a pre-tax loss of £34.1m having made a pre-tax profit of £13.2m in 2023.