Mike Ashley’s retail empire Frasers Group has scrapped plans for a £111 million takeover of British luxury handbags and fashion brand Mulberry.
In a statement to the stock exchange Frasers said the “disappointing” rejection of its 150p a share offer proposals both from the board of Mulberry and its biggest shareholder, the Singaporean investor Challice, meant “it is choosing to bring the offer period to an end.”
Challice is owned by tycoon Ong Beng Seng and his wife Christina and has a 56.4% share in Mulberry.
The mulberry board said earlier this week that it had decided unanimously that “the possible offer is untenable and that the company should focus its attention on driving the commercial performance of the business”.
Frasers said it had made the bid for Mulberry because it would “not accept another Debenhams situation where a perfectly viable business is run into administration”. It lost £150 million on the collapse of the department store chain in which it was a shareholdeIn its statement today Frasers said it “remains a long-term supporter of the well-loved British brand, Mulberry. Frasers continues to believe that market headwinds, and a clear lack of commercial plan, place the company in a very difficult financial position. Frasers welcomes the presentation of a credible plan in the near term.
“Frasers also remains concerned about the governance of Mulberry, and in particular, would not like to see another scenario where the board chooses to exclusively engage with Challice in private on significant matters, such as the emergency subscription of £10 million announced on 27 September.
“The board of Mulberry has consistently recognised Frasers as a supportive shareholder and given its 37% shareholding, Frasers now hopes the board will engage positively on a Frasers appointee to the Mulberry board, a request that has been made several times in recent history.”
Under UK takeover rules, Frasers, owner of Sports Direct, the House of Fraser department stores, Evans Cycles and the Flannels luxury streetwear chain, had until 5pm on 28 October to make a firm offer or walk away.
