Mulberry Group (LON: MUL) firmly rejected a takeover bid from Frasers Group (LON: FRAS) on Tuesday, labelling the proposed offer as “untenable.”
On October 11, Frasers raised its takeover proposal to 150p per Mulberry share, valuing the company at £111 million pounds.
In a statement released today, Mulberry's board of directors stated that they have carefully considered Frasers' revised offer and the position of Challice Limited, the company's majority shareholder.
Given Challice's clear opposition to the bid and Mulberry's focus on driving its commercial performance, the board has unanimously decided to reject the offer.
“After careful consideration with its advisers and in light of the above, 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,” Mulberry said in the statement.
The board reiterated its confidence in the company's future, citing recent strategic moves such as the appointment of a new CEO, a new debt facility, and a capital raising initiative.
While acknowledging Frasers' support for the Mulberry brand through its recent investment, the board said that it will not entertain any further discussions regarding a takeover.
“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. The Board appreciates this and looks forward to further interactions with Frasers in the future,” the statement added.
The rejection of Frasers' bid comes as a blow to the retail giant, which has been seeking to expand its luxury fashion portfolio. It remains to be seen whether Frasers will persist in its pursuit of Mulberry or abandon its takeover attempt.
Looking ahead, Mulberry believes the combination of the appointment of a new CEO, its new debt facility and the recently announced capital raising will put it on a firm footing to ensure it is well set up for future growth.
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