Mike Ashley’s Frasers Group tables £83m Mulberry takeover bid after capital raise snub

Mike Ashley’s Frasers Group has tabled a £83m takeover of Mulberry and launched a tirade against its board after allegedly being shut out of discussions over a £10m fund raise. 

The retail giant, which owns a 37 per cent stake in Mulberry, offered £83m for the rest of the luxury fashion brand, valuing each share at 130p. This was a premium of approximately 11 per cent to the closing share price on 27 September. 

The offer came after Mulberry announced a subscription of new ordinary shares by Challice, the majority shareholder of Mulberry, to raise approximately £10m. 

Mike Ashley’s Frasers Group said it was not aware of the subscription “until immediately prior to its announcement” and that the “total lack of engagement” was an “untenable position for Frasers and the other minority holders of Mulberry shares”. 

It launched an indicative offer around 24 hours after hearing the subscription announcement.

Frasers has until 5pm on 28 October to either to announce a firm intention to make an offer for Mulberry or announce that it does not intend to make an offer.

Mulberry struggles with weak demand

Frasers Group’s indicative bid comes after Mulberry announced a slide in profit – reporting a pre-tax loss of £34.1m having made a pre-tax profit of £13.2m in 2023.

UK retail sales of fell to £84.7m, from £87.7m in 2023, after consumer spending habits “were impacted by the challenging macro-economic uncertainty and inflationary pressures”.

Retail revenue fell by 14 per cent globally, the brand said, with sales in Asia down by 29 per cent year on year. 

Shares then dropped more than 12 per cent in early trades.

Frasers Group said Mulberry’s “unabating difficulties” were part of the reason it announced the indicative bid.

“With our leading retail expertise and presence, and best in class distribution capability, we believe Frasers to be the best steward for returning Mulberry to profitability,” Mike Ashley’s group said.

“Frasers will not accept another Debenhams situation where a perfectly viable business is run into administration,” it said.

Mulberry said it “does not envisage a let up in the near term” of the macroeconomic environment.

“The board and the management team continues to monitor conditions and take prudent action to protect margins and make progress towards becoming a global, sustainable luxury brand,” Mulberry said.