Luxury handbag maker Mulberry has rejected an £83m takeover approach from Mike Ashley’s Frasers Group. The struggling Somerset-headquartered fashion brand said it believed the possible offer from Frasers, which was revealed on Monday, “does not recognise the company’s substantial future potential value”.
Mulberry said it had discussed the approach with its majority shareholder – Singapore-based Chalice, which is controlled by billionaire Ong Beng Seng and his wife Christina.
The firm put faith in its recently appointed chief executive Andrea Baldo to drive a turnaround and said it would stick with the plans for a capital raising.
It said this “provides the company with a solid platform to execute a turnaround and, ultimately, to deliver best value for all Mulberry shareholders.”
“The board has no intention of withdrawing or terminating the subscription or the retail offer announced on 27 September 2024, believing that the capital raising, allowing all Mulberry shareholders to participate on the same terms, is the fairest and most effective way of accessing additional equity funding,” Mulberry said on Tuesday.
“Recognising that Frasers is a committed and important investor in Mulberry, and has publicly stated that it would have been willing to underwrite the subscription, the board looks forward to engaging further with Frasers regarding a pro rata participation in the subscription.”
Frasers Group, which owns Sports Direct and already owns a 37% stake in Mulberry, said on Monday it put forward an approach worth 130p per share, valuing the stake in the company it does not own at £52.4m.
Mulberry was founded by Roger Saul in Somerset in 1971 and is still based in Chilcompton. The brand’s tree logo was designed by his sister, with the company named after the trees he passed every day on his way to school. The first designs were buckled leather belts, with other collections following soon after, including bags and womenswear.
But the brand has struggled over the last year, blaming “tightening” consumer spending. On Friday, the the company released its full-year financial results which showed the business had fallen to a loss before tax of £34.1m – down from £13.2m profit the year before.