Billionaire Mike Ashley’s Frasers Group is walking away from an attempted takeover of Mulberry Group Plc but is still pushing for a board seat at the British handbag maker.
Frasers said Mulberry had not properly engaged with its offer to buy the remainder of the company, in which it already holds a 37 percent stake.
Wednesday’s statement added that a slowdown in the luxury sector “and a clear lack of commercial plan place the company in a very difficult financial position.”
The decision comes after Mulberry turned down Frasers’ latest bid of 150 pence per share Tuesday, up from its first bid of 130 pence last month. Mulberry described the bid as “untenable” and said the initial offer undervalued the company and lacked the support of Singapore’s Ong family, its majority shareholder.
Frasers’ decision means it cannot make another bid for the company in the next six months under UK takeover rules, unless another party tries to buy the business or Mulberry’s board grants permission.
Mulberry revealed plans last month to raise £10 million ($13 million) from a subscription of shares by Challice — the Ong family’s investment vehicle — and a smaller retail offering. The move prompted Frasers to say it could have underwritten any offering, “potentially on better terms” for the business.
Frasers said Wednesday it “would not like to see another scenario where the board chooses to exclusively engage with Challice in private on significant matters.”
Founded by Ashley and previously known as Sports Direct, Frasers is known for its willingness to enter into boardroom battles and has had a number of high-profile clashes with rivals, including Debenhams and House of Fraser. The business is now run by Ashley’s son-in-law Michael Murray and has expanded its premium offering with upmarket outlet Flannels, as well as building stakes in Mulberry and Hugo Boss.
By Jennifer Creery
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