UK's Mulberry rejects higher bid from Frasers

Frasers, which owns 37 per cent of the company, raised its offer to 150 pence per share on October 11 from 130 pence, valuing Mulberry at £83 million ($108.3-million).

Frasers owns Sports Direct, the House of Fraser department stores, Evans Cycles and the Flannels luxury streetwear chain.

However, the retailer’s biggest shareholder Challice, a group controlled by the Singaporean entrepreneur Christina Ong and her husband Ong Beng Seng, turned down the proposal, saying it will not sell its Mulberry Shares to Frasers or support the Possible Offer. Challice’s 56-per cent stake implies it can block any deal.

The Mulberry board today said it had considered the proposal carefully with its advisers and decided unanimously that “the possible offer is untenable and that the company should focus its attention on driving the commercial performance of the business”.

It also reiterated its belief that the combination of Mulberry’s new chief executive, Andrea Baldo, a new debt facility and fundraising of nearly £11 million would put the company “on a firm footing to ensure we are well set up for future growth”.

Acknowledging that Frasers had been supportive of the brand through its participation in the fundraising, in which Frasers bought £3.9 million of new Mulberry shares, the Mulberry board said it looked forward to further interactions with Frasers in the future.

Under British rules, Frasers must make a firm offer for Mulberry by 5pm on October 28 or walk away.

The purchase offer by Frasers came after Mulberry said it needed to raise cash after a £34-million pre-tax loss in the year to the end of March and a drop in sales. Frasers said it would “not accept another Debenhams situation where a perfectly viable business is run into administration”. Frasers, a shareholder in Debenhams, lost £150 million.

Fibre2Fashion News Desk (DS)