Mike Ashley's Frasers Group has criticized management after luxury handbag maker Mulberry pulled out of a takeover plan after a series of offers were rejected.
Frasers, Mulberry's second-largest shareholder with a 37% stake, made multiple offers for the fashion brand, reaching a bid of £111m this week, all of which were rejected.
Mulberry's largest shareholder, Challis, a group run by Singaporean entrepreneur Christina Ong and her husband, had previously said it had no interest in selling its shares. Challice owns a 56% stake, which means he can block any deal.
Frasers, which owns the Sports Direct chain, made a final bid of 150p per share on Tuesday. This was rejected by Mulberry's board of directors.
The board said it had unanimously decided that the proposal was “unacceptable and the company should focus on driving the commercial performance of the business”.
Frasers distanced itself from its pursuit of Mulberry on Wednesday, continuing to criticize the luxury handbag maker's management and saying it had “concerns about Mulberry's governance.” “Frasers continues to believe that market headwinds and a clear lack of commercial planning have left the company in a very difficult financial position,” it added in a statement to investors.
The retail group said it remains a “long-term supporter” of Mulberry, renewed its request for a seat on Mulberry's board and asked the company to present a “credible plan for the short term.”
Mulberry stock fell more than 6% Wednesday afternoon, paring some of its losses from earlier in the day.
Frasers also owns House of Fraser department store, Evans Cycles and luxury streetwear chain Flannels. The company first made the offer for Mulberry after the handbag maker said it needed to raise cash after making a pre-tax loss of £34m in the last financial year due to falling sales. It was. Mr Mulberry warned that spending was slowing among wealthy shoppers in the UK and Asia.
The company's board previously said the recent appointment of Andrea Bardo as chief executive and the £10.75 million emergency share issue had provided the company with a “solid foundation on which to carry out its turnaround”.
Frasers cited the £150m loss it suffered in the department store chain's collapse, saying it “cannot accept a Debenhams-like situation again” where a fully viable business is “run into administration”. , said it first made a bid for Mulberry. I was a shareholder.
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Under UK takeover rules, Frasers had until 5pm on October 28 to provide Mulberry with firm commitments or exit.
Frasers currently has six months to make further proposals to the handbag maker unless certain conditions are met, such as the Mulberry board agreeing to such proposals or there is a material change in the company's circumstances. can't do it.
Mulberry has been contacted for comment.
