Somerset handbag maker Mulberry has rejected Frasers’ increased takeover offer as tensions rise between the company’s largest shareholders.
The luxury fashion brand said on Tuesday it had considered the revised £111m proposal made by the Sports Direct owner on October 11 as well as the position of its majority owner Challice.
Challice, which is owned by Singaporean businesswoman Christina Ong and husband Ong Beng Seng, has a 56.4% stake in Mulberry – and said last week it had “no interest” in selling its share in the Chilcompton-based brand.
Mulberry said in a statement: “After careful consideration with its advisers and in light of the above, the board is unanimously of the view that the possible offer is untenable and that the company should focus its attention on driving the commercial performance of the business.”
It is the second offer from Frasers to be rejected. Mike Ashley’s group’s first bid of £83m was turned down by bosses at Mulberry who said it did not “not recognise the company’s substantial future potential value”.
The handbag brand, which has put its faith in new chief executive, Andrea Baldo, said on Tuesday a new debt facility and a capital raising would put the group “on a firm footing” for future growth.
“The board acknowledges that Frasers, through its participation in the company’s recent fundraising, has shown itself to be supportive of maintaining the value of the Mulberry brand. The board appreciates this and looks forward to further interactions with Frasers in the future.”
Mike Ashley’s holds a 37.3% interest in Mulberry after increasing its stake in the firm earlier this month. Under takeover rules, Frasers now has until October 28 to announce a firm offer or walk away.
Mulberry said on Tuesday its announcement was made without the consent of Frasers.