British luxury fashion brand Mulberry Group plc (AIM: MUL) has rejected an offer from Frasers Group PLC (LON: FRAS), the owner of Sports Direct, to acquire its remaining shares at a premium price.
Frasers, which already holds over one-third of Mulberry’s shares, has made several attempts to discuss a 150p-per-share proposal and has expressed frustration with Mulberry’s unwillingness to engage.
Mulberry responded to the advances today, describing the £83 million offer as “untenable.”
Shares were down 3.9pc as Mulberry said: The Board has also taken into account the firm stance of Challice Limited (“Challice”), which holds a 56.4% majority stake in the Company, regarding the Possible Offer. As outlined in Chalice’s press statement on 13 October 2024, it has made clear that it will neither sell its Mulberry shares to Frasers nor support the Possible Offer.
After thorough consultation with its advisers and considering the above, the Board unanimously concludes that the Possible Offer is not viable. The Company will instead focus on enhancing its commercial performance.
The Board reaffirms the statement made during the announcement of the Company’s audited results on 27 September 2024:
“We believe that the combination of appointing a new CEO, securing a new debt facility, and the capital raising announced today will establish a strong foundation for the Group’s future growth.”
The Board acknowledges Frasers’ support for maintaining the Mulberry brand’s value, demonstrated by its participation in the recent fundraising. The Board appreciates this and looks forward to future engagements with Frasers.
Frasers now has until 5 p.m. on Monday, October 28, to either submit a firm bid or withdraw, in accordance with City Takeover Panel rules.
Comment: As stated previously, given the lay of the land, and its recent share price, MUL should be grabbing 150p with both hands. The fact that it is not may be that it feels more could be on the table. Unfortunately, the company cannot really afford to lose this game of bluff.
