Mike Ashley’s Frasers Group has made an £83 million takeover bid for Mulberry, one of many UK’s most iconic luxurious manufacturers, after being blindsided by a £10 million emergency share provide from the struggling leather-based items maker.
The shock bid affords 130p per share, representing an 11% premium on Friday’s closing worth, with Frasers asserting that it’s “the best steward” to return Mulberry to profitability.
Frasers, which owns Flannels and Home of Fraser, already holds a 37% stake in Mulberry and has positioned itself as a rescuer of British manufacturers. The corporate goals to keep away from one other “Debenhams situation,” referring to the collapse of the division retailer chain in 2019, which led to Frasers dropping its £300 million stake. The takeover try will now set Frasers towards Challice, Mulberry’s majority shareholder, which is managed by the billionaire Ong Beng Seng and his spouse, Christina.
Mulberry not too long ago introduced that it wanted an pressing £10.75 million capital elevate, underwritten by Challice, to shore up its steadiness sheet after a troublesome yr. The Bathtub-based enterprise, recognized for its iconic Bayswater purses, posted a £34 million pre-tax loss for the yr ending in March 2024, after a 4% drop in gross sales to £153 million. The corporate’s auditor additionally flagged “material uncertainty” round Mulberry’s monetary well being in its newest annual report.
Frasers criticised Mulberry’s lack of engagement with shareholders over the rights situation, calling the established order “untenable” for minority holders. Mulberry’s shares had slumped to round 100p on Monday earlier than recovering barely after the Frasers provide was revealed, closing at 124p.
Luxurious manufacturers globally have been hit by robust market circumstances, with Mulberry’s gross sales additional impacted by provide chain disruptions and weaker demand in China. Mulberry’s new CEO, Andrea Baldo, who joined in July after his predecessor Thierry Andretta was ousted, has pledged to stabilise the enterprise by enhancing operational effectivity and concentrating on core UK markets.
Frasers’ bid marks a big second for Mulberry because it might see a shift from Ong’s long-term, discreet possession type to Ashley’s extra aggressive, high-profile method. Whereas the Ong household has rigorously maintained Mulberry’s luxurious standing since 2003, Frasers’ acquisition might result in growth into extra mainstream channels, elevating questions on how the model’s exclusivity could be preserved underneath Ashley’s possession.
As the posh market continues to evolve, Mulberry finds itself on the verge of a possible takeover battle that would reshape its future. The group’s monetary outcomes for the third quarter are anticipated on October 30, the identical day because the UK authorities’s funds announcement.