Mulberry rejects takeover offer from Mike Ashley's Frasers Group.

Mulberry has officially declined a takeover offer from Mike Ashley's Frasers Group, reaffirming its dedication to remaining an independent luxury handbag brand. The decision reflects Mulberry's strategy to maintain control over its operations and future direction, amid increasing interest from major retail players. This move highlights the ongoing dynamics in the luxury fashion market as brands navigate pressures from potential acquisitions.

British luxury brand Mulberry (MUL.L) has rejected a £83 million ($111 million) takeover proposal from retailer Frasers Group (FRAS.L), stating that its majority shareholder did not back the bid and believed it undervalued the company. Despite facing losses, Mulberry recently announced plans to raise capital from shareholders, which includes a proposed £10 million subscription from Challice, its 56% Singaporean backer owned by billionaires Christina Ong and Ong Beng Seng.

In a statement, Mulberry mentioned that Challice is supportive of the company's strategy and is not interested in the potential offer. Mulberry's shares have plummeted nearly 95% from their peak in May 2012, although they saw a brief rally on Monday due to the prospect of Frasers' takeover at a proposed 30% premium to the subscription price. By 0811 GMT, the shares had declined 2.4% to 121 pence in light trading.

Frasers has until October 28 to submit a formal offer or withdraw. Controlled by Mike Ashley, who is also Mulberry's second-largest investor, Frasers indicated in its proposal that it would have been willing to fully underwrite the subscription on potentially better terms for Mulberry. The company aims to elevate its brand by moving further into the luxury goods market, having recently acquired THG's portfolio of luxury goods websites in June and the online retailer MATCHES last year.

MATCHES went into administration in March, after which Frasers acquired its intellectual property assets. The group expressed a desire to avoid a repeat of the Debenhams situation, in which it invested £150 million before the department store ceased operations in 2021. Mulberry stated that the appointment of CEO Andrea Baldo and its capital-raising initiatives should support its turnaround efforts.

While Mulberry has no intentions of retracting or terminating the subscription or retail offer, it plans to engage with Frasers about pro-rata participation in the subscription. The brand also emphasized that Frasers' proposal did not acknowledge its "substantial future potential value."

For questions or comments write to writers@bostonbrandmedia.com

Source: Reuters‍