Mike Ashley’s retail empire has revealed it will not go ahead with plans to take over luxury handbag designer Mulberry.
The billionaire retail tycoon was given the option to seize control of Mulberry after his company, Frasers Group, acquired more than 4 million shares in the designer brand last month.
The £6.5m deal saw Frasers buy 4.34m shares in Mulberry at a 150p per share. It meant that Frasers owned a total of 36.82% of the business.
Acquiring more than 30% of shares in a company usually means that the buyer has to make a mandatory cash offer to buy the remaining stake in the business from existing shareholders. However, as another company – Challice Ltd – already owned 56% of the shares in Mulberry, Frasers Group was told it did not have to make a mandatory offer.
Frasers did reserve the right to make a voluntary offer for the company, signalling that it had some interest in a takeover deal. But in a statement today, Frasers said it had decided not to make an offer.
The company said: “Further to the announcement made on 19 November 2020 in relation to a possible offer for Mulberry Group plc (“Mulberry”) by Frasers Group, Frasers Group confirms that it does not intend to make an offer under Rule 2.7 of the Code.”
Earlier this month Frasers Group saw one of its businesses put up for sale.
North West online retailer Studio Retail Group put itself on the market as part of a strategic review to create the most value for shareholders.
Frasers Group owns a 37% stake in the company, which it has described as “misunderstood by the market and as a consequence, significantly undervalued”.