What's happened
Frasers Group has proposed a £83 million takeover bid for Mulberry, valuing shares at 130p each. Mulberry's board rejected the offer, citing its potential for future growth and support from its majority shareholder, Challice. The luxury brand is currently facing financial difficulties, including a £34 million pre-tax loss last year.
Why it matters
What the papers say
According to The Guardian, Frasers Group's offer for Mulberry was made after the luxury brand announced a £10.75 million share placing to bolster its finances. The board of Mulberry stated that the offer does not reflect the company's future potential value, as reported by The Independent. Sky News highlighted Frasers' concerns about Mulberry's financial health, referencing a 'material uncertainty' in its latest annual report. The Telegraph noted that Challice, Mulberry's majority shareholder, has no interest in supporting Frasers' bid, reinforcing the board's commitment to its turnaround strategy.
How we got here
Mulberry, a luxury handbag maker, has struggled with declining sales and a significant loss in the past year. In response, it announced plans to raise over £10 million through a share placing. Frasers Group, which already owns a 37% stake in Mulberry, made its offer following this announcement, expressing concerns about the brand's future.
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