Mulberry’s billionaire backer has rejected a takeover bid from Mike Ashley’s Frasers Group, warning it undervalues the company.
The luxury handbag maker said the £83m takeover bid tabled by Frasers, which owns Sports Direct, “does not recognise the company’s substantial future potential value”.
The Singapore-based billionaire hotelier Ong Beng Seng and his wife Christina own a controlling 56pc stake in the luxury retailer through their holding company Challice.
In an update to shareholders on Tuesday, Mulberry said Mr Ong “has no interest in supporting the possible offer”.
Instead, it will press ahead with plans announced on Friday to tap shareholders for almost £11m as it battles a wider downturn in the luxury market as well as a slump in UK sales after Rishi Sunak abolished VAT-free shopping for overseas tourists.
Mulberry said this was the “fairest and most effective way” of raising cash.
It invited Frasers to take part in the process.
The company said: “Recognising that Frasers is a committed and important investor in Mulberry, and has publicly stated that it would have been willing to underwrite the subscription, the board looks forward to engaging further with Frasers regarding a pro rata participation in the subscription.
“In addition, the board has been informed that Challice is supportive of the company’s strategy and has no interest in supporting the possible offer. As a result of the above, the board has rejected the possible offer.”
Frasers, which is yet to respond to the rejection of its bid, said on Monday it had not been made aware of the fundraising until immediately prior to the public announcement to the market.
The retail group, which also has a stake in the luxury German brand Hugo Boss, is Mulberry’s second-largest shareholder and owns 37pc of its stock.
Frasers hit out at Mulberry on Monday, saying it would not “accept another Debenhams situation where a perfectly viable business is run into administration”.
Mr Ashley became embroiled in a bitter row with Debenhams after his £180m stake in the retailer became worthless when the chain went bankrupt.
Frasers has until 5pm on 28 October to make another takeover bid or walk away.
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