Luxury handbag maker Mulberry Group Plc rejected a takeover approach from Frasers Group, the parent of Sports Direct, and announced plans to proceed with its emergency fundraising to support a turnaround.
Mulberry said Frasers 130 pence-a-share offer undervalues the company and does not have the support of Singapore’s Ong family, the majority shareholder of Mulberry with a 56 percent stake.
The board said Mulberry’s new CEO, Andrea Baldo, and planned emergency financing “provides the company with a solid platform to execute a turnaround.”
On September 27, Mulberry announced an emergency £10.75 million placement of shares to shore up its balance sheet. Mulberry said it needed to raise cash after its pre-tax loss fell to a £34 million loss in the year to the end of March from a £13 million profit a year before, and sales fell by 4 percent to £153 million. It added that sales were down by 18 percent for the 25 weeks since the period ended.
On September 30, Frasers proposed an £83 million ($111 mm) offer to buy Mulberry. Frasers, which also owns Evans Cycles, the House of Fraser department stores, the luxury streetwear chain Flannels, and multiple brands from Slazenger to Jack Wills, already owns a 37 percent stake in Mulberry.
Frasers added it wanted to avoid “another Debenhams situation,” referring to the department store chain that collapsed in 2019. Frasers had invested £150 million in Debenhams, which went out of business in 2021 and wiped out shareholders’ stakes.
Image courtesy Mulberry
