What: Mulberry rejects Frasers Group's improved £111 million takeover offer, citing the position of its majority shareholder Challice Limited.

Why it is important: This development illustrates the ongoing consolidation attempts in the luxury retail sector and the resistance from some established brands to such takeovers.

Mulberry, the British luxury brand, has rejected an improved £111 million potential offer from Frasers Group, citing the position of its majority shareholder, Challice Limited. The offer of 150 pence in cash for each Mulberry share not already owned by Frasers represented a 50% premium to the recent share subscription price and a 40% premium to the three-month average price before Mulberry's capital raise announcement . This rejection follows an earlier £83 million bid that was also turned down, demonstrating Frasers' persistent interest in acquiring the brand . The improved offer comes amid a significant decline in Mulberry's stock price, with shares down more than 30% over the last year and 22% since the start of 2024, reflecting broader challenges in the luxury market. Frasers Group, which already owns a 37% stake in Mulberry, has been actively pursuing acquisitions in the luxury retail sector as part of its strategy to reposition itself as a premium fashion giant . This approach is evidenced by recent acquisitions such as Matches for £52 million and increased stakes in other brands. However, Mulberry's rejection, supported by its majority shareholder, highlights the complex dynamics and potential resistance in luxury retail acquisitions, especially when targeting well-established brands with strong existing ownership structures.

IADS Notes: Frasers Group's attempt to acquire Mulberry is part of a broader strategy of strategic investments and acquisitions in the luxury retail sector. Under the leadership of CEO Michael Murray and founder Mike Ashley, Frasers has been actively pursuing stakes in companies deemed of "strategic importance" . This approach often involves purchasing shares when market sentiment is low, aiming to improve trading relationships or secure potential acquisition opportunities. The group's diverse portfolio includes brands like Jack Wills and Evans Cycles, and it has been expanding both domestically and internationally . The rejection by Mulberry demonstrates the challenges Frasers faces in its expansion strategy, particularly when dealing with established luxury brands that have strong existing ownership structures and potentially different visions for their future.

Mulberry refuses enhanced offer made by Frasers