The board of Mulberry has unanimously rejected the second bid from retail giant Frasers as “untenable”.
Frasers launched its first bid on 1 October for £83m, which was subsequently rejected as too low by Mulberry, and its second of £111m on 11 October.
Mulberry reiterated its statement from the first time it rejected Frasers’ bid: “We believe that the combination of the appointment of a new CEO, our new debt facility and the capital raising announced today [30 September] will put the Group on a firm footing to ensure we are well set up for future growth.”
Mulberry announced the appointment of Andrea Baldo to replace Thierry Andretta as CEO in July.
In September, Mulberry announced a slide in profit – reporting a pre-tax loss of £34.1m having made a pre-tax profit of £13.2m in 2023 – at the same time as a subscription of new ordinary shares by Challice to raise approximately £10m.
Part of the reason Frasers launched its initial bid was because it was snubbed from this capital raise – although it later participated – as well as Mulberry’s “unabating difficulties”.
“Frasers will not accept another Debenhams situation where a perfectly viable business is run into administration,” it said. Frasers lost £150m after Debenhams collapsed in 2021.
The luxury brand added: “Through its participation in the company’s recent fundraising, [Frasers] has shown itself to be supportive of maintaining the value of the Mulberry brand. The board appreciates this and looks forward to further interactions with Frasers in the future.”
Challice, which is backed by a Singapore-based firm owned by billionaires Christina Ong and Ong Beng Seng, owns a 56 per cent stake in the luxury retailer, meaning Frasers would need the support of Challice to complete a successful bid.
After Frasers’ second bid, Challice said it had “no interest in… selling its Mulberry Shares to Frasers”, adding that it was an “inopportune time” for Mulberry to be sold.
Under City rules, Frasers has until 5pm on 28 October to either announce a firm intention to make an offer for Mulberry or announce that it does not intend to make an offer.