Luxury handbag manufacturer Mulberry has turned down a takeover bid from Mike Ashley’s Frasers Group, which valued the company at £83m. The struggling British fashion brand stated that the potential offer from Frasers, revealed on Monday, "does not recognise the company’s substantial future potential value". Mulberry discussed the approach with its majority shareholder, Singapore-based Challice, controlled by billionaire Ong Beng Seng and his wife Christina.
The Somerset-based firm expressed confidence in its newly appointed chief executive Andrea Baldo to lead a revival and confirmed it would proceed with plans for capital raising. It stated this "provides the company with a solid platform to execute a turnaround and, ultimately, to deliver best value for all Mulberry shareholders. 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.
" Instead, the company will seek discussions with Frasers over a "pro rata participation" in the cash-call. Frasers Group, owner of Sports Direct and already holding a 37% stake in Mulberry, announced on Monday an approach worth 130p per share, valuing the stake in the company it does not own at £52.4m.
This follows Mulberry's announcement on Friday that it needed to raise more than £10 million after reporting a significant loss for the past year. The luxury fashion company has reported a staggering £34.1m pre-tax loss for the year ending Mar.