Mulberry (LON: MUL) shares are up around 4% in early Tuesday trading after the company said it had rejected a potential takeover bid from Frasers Group (LON: FRAS), which proposed acquiring the remaining shares it does not already own at 130p per share.
Frasers, majority owned by Mike Ashley, currently holds a 36.8% stake in the luxury fashion brand.
Mulberry's board said that after consulting with financial and legal advisers, as well as majority shareholder Challice Limited, it concluded that the offer “does not recognise the company's substantial future potential value.”
Challice, which owns 56.1% of Mulberry, also expressed support for the company's current strategy and refused to back the offer.
The company's board believes that the recent appointment of Andrea Baldo as CEO, along with its subscription and retail Offer launched on 27 September 2024, provides a strong foundation for Mulberry's turnaround.
While rejecting the offer, Mulberry's board acknowledged Frasers' commitment as a key investor and expressed openness to further discussions, particularly around Frasers' pro rata participation in the ongoing subscription.
Frasers has until 28 October 2024 to either make a formal offer or withdraw its proposal. Mulberry remains in an “offer period,” and the board has highlighted that there is no certainty any formal offer will be made.
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