The board of today rejected the £83 million takeover offer from ’s Fraser Group. The owners of Sports Direct, Evans Cycles, and yesterday said it would make an offer for the 63% of the luxury brand it did not already own at 130p a share. It made the surprise move after Mulberry unveiled an emergency £10.
75 million share placing to shore up its battered balance sheet. Mulberry had said it needed to raise cash after it fell to a £34 million pre-tax loss in the year to the end of March. But today the handbag maker, which is 56.
1% owned by Singapore’s Challice said it “believes that the combination of the recent appointment of Andrea Baldo as CEO alongside the recently announced subscription and retail offer provides the Company with a solid platform to execute a turnaround and, ultimately, to deliver best value for all Mulberry shareholders. “In light of this, the board has concluded that the possible offer does not recognise the Company’s substantial future potential value. In addition, the board has been informed that Challice is supportive of the Company’s strategy and has no interest in supporting the possible offer.
As a result of the above, the Board has rejected the possible offer. In a statement issued on Monday, Frasers said it would “not accept another situation where a perfectly viable business is run into administration”. The statement said the group “was not aware of the [planned cash raising by Mulberry] until immediately prior to its announcem.