Challice rejects Frasers' takeover bid for Mulberry

The British luxury handbag manufacturer Mulberry continues to be challenged by takeover attempts from the Frasers Group. Majority shareholder Challice has rejected an increased takeover bid by the Frasers Group amounting to 111 million pounds. This is the second offer from billionaire Mike Ashley, whose company already holds 37% of shares in Mulberry. In a press release, Challice made it clear that there is no interest in selling additional shares to the Frasers Group, which operates Sports Direct, House of Fraser, Evans Cycles, and Flannels, among others. Frasers had raised the offer to 150 pence per share after a previous offer of 83 million pounds at 130 pence per share was rejected in early October 2024. The financing of the takeover was to be covered by Frasers' existing liquid funds, supported by financial resources from a long-term loan and a revolving credit facility of over 1.4 billion pounds. Challice was displeased with the timing of the offer, as Mulberry recently had to announce a pre-tax loss of 34 million pounds for the fiscal year ending in March and was planning a capital increase. The Frasers Group, with a loss of 150 million pounds due to the Debenhams debacle behind it, hoped to avoid a similar economic misfortune by acquiring Mulberry. The management of Mulberry remained confident in their ability to turn the situation around. The appointment of Andrea Baldo as CEO and an urgent equity placement of 10.75 million pounds are considered key measures for stabilization. Challice, whose veto position is crucial, urged Frasers to abandon their takeover ambitions. Despite Frasers supporting Mulberry in the capital increase and acquiring shares worth 3.9 million pounds, Challice remains firm in his opposition. The majority shareholder hopes this stance will lead Frasers to publicly withdraw the takeover bid. In the takeover battle, Houlihan Lokey UK is serving as Mulberry's exclusive financial advisor, while Jefferies International exclusively supports Frasers.