Frasers Group has announced that it will no longer pursue the acquisition of Mulberry, citing governance issues after the luxury handbag retailer’s board flatly rejected its most recent proposal.
The owner of Sports Direct, which possesses a 37% stake in the luxury brand, had made a revised cash offer earlier this month, proposing 150p per share for the remaining shares it doesn’t already own, which would value the company at £111 million.
However, Mulberry’s board found the offer “untenable” after majority stakeholder Challice, owning 56%, expressed “no interest in selling its Mulberry shares to Frasers or providing any irrevocable or other commitment regarding the proposed offer.”
In a statement, Frasers called the outcome “disappointing” but reaffirmed its ongoing support for the cherished British brand.
The owner of Sports Direct noted its growing concerns regarding the governance of Mulberry, the apparent absence of a commercial strategy amid mounting market challenges, and significantly, the financial troubles currently facing Mulberry.
The group further expressed that it would prefer not to see a repeat of a scenario where the board engages exclusively with Challice on crucial issues, such as the emergency subscription of £10 million that was announced last month.
Although it has abandoned its takeover bid, the group is advocating for the inclusion of a Frasers representative on Mulberry’s board.
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