Mulberry's biggest investor declines Frasers' takeover offer
- Challice Limited, holding a 56% stake in Mulberry, has rejected Frasers Group's takeover offers, stating it is not the right time to sell.
- Frasers initially proposed an £83 million bid, later increasing it to £111 million, which still falls short of Mulberry's historical trading value.
- Despite financial difficulties, Mulberry's board is optimistic about its recovery strategy and believes it can provide better value for investors.
In the UK, Mulberry is currently evaluating a takeover proposal from Frasers Group after its largest shareholder, Challice Limited, rejected an earlier offer. Challice, which holds a 56% stake in the luxury fashion brand, stated it had 'no interest' in selling its shares, citing that it was 'an inopportune time for Mulberry to be sold.' Frasers initially proposed an £83 million bid on September 30, which was followed by a revised offer of £111 million, representing a 28% premium over Mulberry's share price prior to the offer period. Despite facing significant financial challenges, including a 4% decline in turnover and an 18% drop in sales in recent months, Mulberry's board believes that recent leadership changes and a fundraising plan will provide a solid foundation for recovery. The company has engaged advisers to assess its position regarding the takeover bid, emphasizing that there is no certainty an offer will be made. Analysts suggest that Frasers may struggle to secure the acquisition due to the substantial resistance from Challice, which views the offer as inadequate compared to Mulberry's historical trading value. As a result, Mulberry's shares saw an 18.2% increase following the announcement of the revised proposal, reflecting investor optimism despite the ongoing economic pressures affecting the luxury goods market.