Mulberry has declined a takeover proposal from Frasers Group, which was valued at £83 million, following a bid from the Mike Ashley-led firm for the struggling luxury fashion brand.
On September 30, Frasers put forth a cash bid of 130p per share for Mulberry, which amounts to £83 million and represents a 30% premium over the retailer’s recent share price.
After discussions with financial advisors and its majority stakeholder Challice, Mulberry’s board determined that Frasers’ proposal “does not acknowledge the company’s significant future potential value.”
Challice, which possesses a 56.1% ownership in Mulberry, also expressed backing for the ongoing turnaround strategy led by new CEO Andrea Baldo, who took the helm in July.
Consequently, Mulberry’s board has turned down the offer and will move forward with its plans to raise over £10 million in cash.
The board emphasized that this capital-raising initiative would allow all shareholders the opportunity to engage in the company’s recovery efforts on equitable terms.
Frasers, which owns 37% of Mulberry’s shares, raised alarms about the retailer’s prospects after its auditors indicated “material uncertainty related to going concern” on Friday.
The group voiced its intention to “not accept a scenario akin to Debenhams, where a viable business is driven into administration.”
Frasers has until October 28 to present a firm offer or withdraw, in accordance with UK takeover regulations.
The Mulberry board stated it remains willing to discuss with Frasers regarding a pro-rata share in the capital raise.
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