Mulberry Turns Down Second Bid Offer from Frasers Group

The UK-based Mulberry, a British fashion company owned by Singapore’s Challice Limited and best known for its luxury leather goods, particularly women’s handbags, has turned down a second bid offer of $144.90 million from Frasers Group.

Describing the diversion as “unwelcome,” Challice Limited, which holds 56.4% stake in the company, has spurned the revised offer. Frasers is the second largest investor with 37% shares in Mulberry and intends to acquire the company. Its original offer of $108.35 million was rejected by Mulberry on value grounds.

“We believes that it is an inopportune time for Mulberry to be sold and particularly regrets the distraction that the possible offer is bringing to the company and its management team at this time. It has no interest in either selling its Mulberry shares to Frasers or providing Frasers with any irrevocable or other undertaking with regards the possible offer,” the company said.

Mulberry also said, in a statement to the stock exchange, that it was working with advisers to consider the company’s position on the bid. The board also highlighted that there can be no certainty that an offer will be made for the company nor as to the terms on which any such offer might be made.

Revised Offer

Frasers Group, has offered 150 pence per Mulberry share, up from 130 pence a share previously. The offer represents a 50% premium to the price at which Mulberry earlier this month raised funds—100 pence a share—and a premium of about 40% to the three-month average price of the company as of Sept. 27, before Mulberry outlined its plans for a capital raise, Frasers said.

in light of Mulberry’s catastrophic results, its necessity for emergency funding and difficult market backdrop, it” strongly believes it can provide the appropriate insulation and investment to support a much-loved British brand,” Frasers Group said.

Frasers said that the proposed cash consideration would be funded from the company’s existing cash resources. The offer would become firm after receiving irrevocable approval from Mulberry’s board and would be subject to the regulatory approval, it said.

As part of the Frasers portfolio, it said the Mulberry brand would be provided with the platform to ensure its long-term survival and success. 

Under the City takeover rules, Frasers Group faces a deadline of 28 October to present a firm offer or retract its proposal. The proposed acquisition by Frasers, which currently owns a substantial share of Mulberry, has been deemed ‘inopportune’ by the principal stakeholders.