Mulberry Owner Challice Rejects Fresh Bid, Tells Frasers to Walk Away

The luxury goods market has witnessed a significant development with Mulberry's majority shareholder, Challice, rejecting a fresh takeover bid from Frasers Group. In a statement, Challice, controlled by Singapore-based billionaires Christina Ong and Ong Beng Seng, expressed its lack of interest in selling its Mulberry shares to Frasers or providing any undertakings regarding a potential offer.


This rejection marks the second time in less than two weeks that Challice has turned down Frasers' advances. According to stock exchange rules, Frasers must deliver a firm and final offer to the Mulberry board or announce its intention not to make an offer by no later than 5 p.m. London time on October 28.

Challice described Frasers' advances as "distracting" to the company and its management. It also noted that Frasers would need to secure control of more than 50% of the issued Mulberry shares for any offer to be successful. With a 56.4% stake in Mulberry, Challice argued that without its support, any offer would fail. Challice hopes that by making its position clear, Frasers will be encouraged to announce that it does not intend to make an offer for Mulberry.


Challice has been a majority shareholder in Mulberry since 2002 and has faced similar situations with Frasers in the past. In 2020, Frasers built up a stake so high that it was forced to make a bid or leave the company, eventually walking away. Frasers, controlled by retail tycoon Mike Ashley, specializes in buying stakes in distressed companies or those that sell through its retail chains.

In its statement, Frasers described Mulberry's latest financial results as "catastrophic" and strongly believes it can provide the appropriate insulation and investment to support the long-term survival and success of the Mulberry brand. However, Frasers' track record with luxury brands is questionable, as it purchased Matches at a knockdown price of 52 million pounds and placed it into administration shortly afterward.

Challice has acknowledged the challenges it is facing with Mulberry and has underwritten a capital raise of 10.75 million pounds to help restore the brand's fortunes and deliver value to shareholders. Frasers has challenged Challice's strategy, saying it has significant reservations that the new capital raised would be enough to support the business through the near to medium term. Frasers believes that this will likely lead to another capitalization event unless there is immediate and very real change at the company.

In conclusion, Challice's rejection of Frasers' fresh bid highlights the ongoing tension between the two parties over the future direction of Mulberry. While Frasers believes it can provide the necessary support for the brand's long-term success, Challice remains unconvinced and has chosen to maintain its majority stake in the company. The outcome of this situation will have significant implications for Mulberry's future and the broader luxury goods market.