Following the rejection of Frasers Group’s bid for Mulberry Group, it has submitted a revised offer for the portion of the business it does not currently own.
Frasers is a significant minority shareholder, owning approximately 37% of the issued share capital of the fashion brand.
Frasers’ initial offer (in which Mulberry shareholders would have been entitled to receive 130 pence in cash for each Mulberry share) followed Mulberry announcing a proposed subscription for 10,000,000 new ordinary shares in the capital of the company by Challice Ltd (the company’s majority shareholder), at a price of £1 per share, and a separate offer to existing shareholders of the company of up to 750,000 new ordinary shares at the subscription price.
Following the rejection of Frasers’ proposal, the business has said it is “unclear to Frasers how…the Board of Mulberry could have concluded that the Subscription Price was appropriate before, days later, rejecting [its] Initial Proposal (at a price 30% higher).”
Frasers further shared “significant reservations” that the £10 million raised under the subscription will be enough to support the business through the near to medium term.
Frasers also pushed back against Mulberry’s statement that its offer did not recognise the “substantial future potential value of Mulberry,” noting: “Frasers is clear that there is no current commercial plan, turnaround or otherwise.”
It added: “Despite…Mulberry’s catastrophic results, its necessity for emergency funding and difficult market backdrop, Frasers strongly believes it can provide the appropriate insulation and investment to support a much-loved British brand. As part of the Frasers portfolio, the Mulberry brand would be provided with the platform to ensure its long-term survival and success.”
Under the new offer by Frasers, Mulberry Shareholders would be entitled to receive 150 pence in cash for each Mulberry Share. This implies a valuation of approximately £111 million for the entire issued, and to be issued, ordinary share capital of Mulberry, or approximately £72 million for the entire issued and to be issued share capital of Mulberry that Frasers does not own.
It marks a premium of 50 per cent to the subscription price of £1.00 per share.
Challice Limited, the company’s 56.4 per cent majority shareholder, however, has been quick to state publicly that it “has no interest in either selling its Mulberry Shares to Frasers or providing Frasers with any irrevocable or other undertaking.”
