The Mulberry owner has refused to sell its shares after Mike Ashley’s Frasers Group increased their bid of £111m.
Challice is a group controlled and owned by Singaporean entrepreneur Christina Ong with her husband Ong Beng Seng. They own 56% of Mulberry, giving them the right to block any bid. Frasers was asked to abandon plans to buy the brand, claiming that it would be an “inopportune moment” for the struggling company.
Frasers Group, who already owns 37% Mulberry, raised its offer to 150p per share on Friday night after a previous £83m bid , worth 130p per share, , was rejected earlier this month by the company.
Frasers made the offer after Mulberry, which is the owner of Sports Direct, House of Fraser, Evans Cycles, and Flannels luxury streetwear, said that it needed cash to pay for its losses of £34m (£34m) before tax in the fiscal year ending March.
Frasers, who lost £150m in the collapse of Debenhams, where it was an investor, made the bid to buy Mulberry because it “would not accept another Debenhams scenario where a perfectly viable company is put into administration.”
Last month, the Mulberry Board said that the recent appointment Andrea Baldo to the position of chief executive and the emergency £10.75m shares placing “provides the firm with a solid foundation for executing a turnaround”.
On Sunday, Challice welcomed Fraser’s decision to take part in the fundraising round where the Sports Direct owner purchased £3.9m in new Mulberry shares.
It said that it had no intention of selling Mulberry shares to Frasers, or giving Frasers any irrevocable commitment or other assurances in relation to the potential offer.
It said that Frasers could not take Mulberry over without its support and added: “Challice hopes by making its position known, Frasers will feel encouraged to announce it doesn’t intend to make a bid for Mulberry.”
It stated that it “strongly supported the company and the current management team”, and believed in Mulberry’s long-term potential.
“Challice regrets that this is not the right time to sell Mulberry and the potential offer will distract the company at this time and the management team.”
Mulberry, founded in 1971 by Roger Saul, an entrepreneur, and Joan Saul, his mother, is known for its leather products, especially women’s bags.
It has been struggling to compete with international brands in recent years, particularly since the post Brexit end of shopping tax exemptions for UK tourists.
Thierry Andretta led Mulberry in 2015 and oversaw a move to upmarket. But the arrival of Baldo – who ran Ganni fashion label before, and was instrumental in a turn around at Italian streetwear brand Diesel – is expected to signal a return to a broader audience.
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