On October 13, the major shareholder of the British luxury brand Mulberry, operated by the Mulberry Group, issued a statement declaring that it has no intention of selling its shares in response to Frasers Group’s takeover proposal. This move clearly signals an intent to stop Frasers’ acquisition attempt.
Mulberry, known as a luxury leather bag brand from the UK, gained widespread attention in the 2010s, thanks to fashion icons like Alexa Chung and Kate Moss who sported the brand. However, in recent years, rising costs and the declining UK economy have taken their toll, leading to a downturn in the company’s performance. For the full year 2024, revenue fell from £159.1 million the previous year to £152.8 million, and net losses plummeted by 353%, from a £13.2 million profit to a £33.5 million loss.
In response to these challenges, Mulberry announced on September 27 that it aimed to raise approximately £10 million in capital. Challice Limited, the Singaporean major shareholder that holds 56.1% of Mulberry’s shares, agreed to subscribe to 10 million new ordinary shares at £1 per share. In addition, other shareholders were offered the option to participate in the capital increase, with a maximum of 750,000 new ordinary shares available.
Meanwhile, within 24 hours of this announcement, Frasers proposed buying all of Mulberry’s issued and to-be-issued shares it did not own. Frasers, which currently holds 37% of Mulberry’s shares, offered a purchase price of 130 pence per share. This valued the remaining shares at approximately £52.4 million.
However, Mulberry rejected this offer, stating it “undervalued the company.” In response, Frasers raised its bid on October 11, but just two days later, Challice issued another statement.
Challice commented, “Challice believes that it is an inopportune time for Mulberry to be sold and particularly regrets the distraction that the possible offer is bringing to the company and its management team at this time.”
The statement continued, “Challice has no interest in either selling its Mulberry shares to Frasers or providing Frasers with any irrevocable or other undertaking with regards to the possible offer,”
“Challice hopes that by making its position clear, Frasers will be encouraged to announce that it does not intend to make an offer for Mulberry.”
Under UK takeover regulations, Frasers has until October 28 to make a formal offer or withdraw its bid.