Dive Brief:
- The board of directors at Mulberry LLC joined its majority shareholder Challice Limited in rejecting an unsolicited cash offer made earlier in October by minority shareholder Frasers Group, according to a Tuesday statement.
- The board said in its statement that after careful consideration with its advisers and in consideration of Challice’s position, it “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.”
- On Oct. 14, Challice rejected Mulberry’s offer, citing its Oct. 13 statement that said it “has no interest in either selling its Mulberry Shares to Frasers or providing Frasers with any irrevocable or other undertaking.”
Dive Insight:
This is the second attempt Frasers has made to acquire the issued share capital of Mulberry that it does not already own.
On Sept. 30, Frasers offered 83 million pounds, or approximately $108 million, to acquire the brand. After the board of directors rejected that bid, Frasers returned with an increased offer of 111 million pounds.
However, in its latest rejection of that bid, the board of directors reiterated a statement made during Mulberry’s audited results on Sept. 27 reaffirmed the company’s optimistic outlook.
“We believe that the combination of the appointment of a new CEO, our new debt facility and the capital raising announced today will put the Group on a firm footing to ensure we are well set up for future growth,” the statement said.
In the earnings report, Mulberry also acknowledged a disappointing financial performance for the 52-week period ended March 30, and said that over the course of its fiscal year, “the macro-economic environment presented significant challenges for the luxury sector, with markets across the globe facing a tightening of consumer spending.”
The company’s reported group revenue for that fiscal period was down 4%, with a pre-tax loss of 34 million pounds, compared to a pre-tax profit of 13.2 million pounds in 2023.
In its rejection of the most recent bid, the board said “Frasers, through its participation in the Company’s recent fundraising, has shown itself to be supportive of maintaining the value of the Mulberry brand, adding that the board was appreciative and “looks forward to further interactions with Frasers in the future.”
According to the rules of the London Stock Exchange, Frasers has until Oct. 28 to make an offer or announce it won’t make any further offers, although that deadline can be extended by the Takeover Panel.
Mulberry’s board added that “there can be no certainty that an offer will be made for the Company.”
