Mulberry dismisses £111m takeover bid from Mike Ashley's Frasers as 'untenable'

Luxury handbag manufacturer Mulberry has dismissed an improved £111m takeover bid from Mike Ashley's Frasers Group as "untenable".

The London-listed fashion label chose to focus on enhancing business performance instead, in line with the sentiments of its top shareholder, Challice – a group owned by Singaporean power couple Christina Ong and Ong Beng Seng – which has already rejected the offer, saying it has no plans to sell to Frasers.

Mulberry said: "After careful consideration with its advisers... the board is unanimously of the view that the possible offer is untenable and that the company should focus its attention on driving the commercial performance of the business."

Frasers, the group behind Sports Direct and holder of a 37% stake in Mulberry, initially lodged an enhanced £111m offer on October 11, willing to pay 150p per share for the remaining shares they do not possess to gain full control. This comes after a previous 130p per share offer that put Mulberry's value at £83m was rejected earlier in the month.

Frasers have tightened their grip on the high-end market recently, highlighted by their increased investment in Hugo Boss. Nevertheless, their latest acquisition efforts coincide with a drop in Mulberry's stock value precipitated by a global contraction in luxury spending, as inflationary pressures begin to impact affluent consumers.

Mulberry's shares have taken a hit, plunging over 30% in the past year and tumbling more than 22% since the dawn of 2024. The luxury brand saw its stock dip by 4% during Tuesday morning's trading session.

Frasers Group is now on the clock, with a deadline of 5pm on Monday October 28 to either firm up their bid or back out, as per the regulations of the City Takeover Panel. In an attempt to smooth things over after spurning Frasers' initial advance, Mulberry has acknowledged the backing from the Sports Direct owner, particularly noting its contribution to the company's recent capital raising efforts.

Mulberry expressed gratitude, stating: "The board acknowledges that Frasers, through its participation in the company’s recent fundraising, has shown itself to be supportive of maintaining the value of the Mulberry brand."

They added, "The board appreciates this and looks forward to further interactions with Frasers in the future."