Fraser’s Group has increased its stake in luxury handbag maker Mulberry days after the Somerset-headquartered retailer rejected a takeover bid by the company.
Mike Ashley’s business has subscribed to 3.9 million shares in the fashion firm at 100 pence per share. It means the Sports Direct owner now holds a 37.3% interest in Mulberry.
Fraser’s participation in the subscription does not mean it needs to make a mandatory cash offer to other Mulberry shareholders.
Singapore-based Challice, which is controlled by billionaire Ong Beng Seng and his wife Christina, remains the Chilcompton company’s largest shareholder with a 56% stake in the business.
The struggling fashion brand rejected a takeover bid from Fraser’s Group on Tuesday. Mulberry said the possible offer from Frasers did not recognise the company’s “substantial future potential value”.
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”.
Mulberry has struggled over the last year, blaming “tightening” consumer spending. In its most recent set of financial results, the business fell to a loss before tax of £34.1m – down from £13.2m profit the year before.
The company said on Friday it is still open to an offer from Fraser’s Group.