Frasers Group makes £83m offer for Mulberry

Mike Ashley’s Frasers Group has launched an audacious £83 million takeover bid for Mulberry, one of Britain’s best-known luxury brands, after being blindsided by a £10 million rights offer.
The Sports Direct owner has offered 130p per share, a premium of 11 per cent to the closing price on Friday, believing it is “the best steward” to return the struggling leather goods maker to profitability.
Frasers, which also owns Flannels and House of Fraser, said it refused to “accept another Debenhams situation where a perfectly viable business is run into administration”. The statement referred to the collapse of the department store chain in 2019, wiping out Frasers’ stake, worth £300 million at one stage.
The takeover attempt will pit Frasers, which has a 37 per cent stake in the luxury company, against Challice, Mulberry’s long-term majority shareholder. Challice is controlled by the Malaysian billionaire Ong Beng Seng and his wife, Christina, who own about 56 per cent of the Aim-listed firm.
Frasers’ offer for the rest of the Mulberry shares that it does not own would need the Ongs’ approval. Ong, a property tycoon, was arrested last year and released without charge in connection to a corruption case against Singapore’s transport minister, Subramaniam Iswaran.
Prosecutors had alleged that Iswaran was accepting favours from Ong, such as tickets to Formula 1 races and musicals in the West End. Iswaran admitted improperly receiving gifts, but prosecutors dropped more serious corruption charges. Singapore’s authorities will take a decision on Ong “soon”, according to the latest reports. Mulberry declined to comment on the case.
The proposed Frasers deal followed an announcement by Mulberry on Friday that it needed an emergency £10.75 million placing of shares to boost the balance sheet, underwritten by Challice.
Frasers said on Monday that it had only been made aware of the plan to raise funds “immediately prior to its announcement”.
“Given this total lack of engagement, we believe the status quo to be an untenable position for Frasers and the other minority holders of Mulberry shares,” it said.
Frasers added that it was also “exceptionally concerned” at an opinion by Mulberry’s auditor in its annual report, published after the market closed on Friday, which noted there was “material uncertainty related to going concern”.
Bath-based Mulberry, founded in 1971 and best known for its Bayswater handbags, has struggled amid the wider, global luxury downturn.
Mulberry had said it needed to raise fresh funds after a tough 12 months in which the brand fell to a £34 million pre-tax loss in the year to the end of March, from a £13 million profit the year before, after sales dropped by 4 per cent to £153 million. Sales declined by 18 per cent in the 25 weeks after the financial year ended.
Mulberry’s share price, which had stood at 125p at one point on Friday, was trading at about 100p on Monday morning before recovering to close up 6½p, or 5.5 per cent, at 124p after the Frasers offer was announced.
Frasers said its proposal represented a 30 per cent premium on the 100p subscription price for Mulberry’s retail offer and was 11 per cent higher than the closing share price on Friday.
Clive Black of Shore Capital said that “such a premium, set against recent market levels for UK stocks, is modest, but this is not a liquid play as opposed to something of a concentrated register and scope for a proper spat”.
He added that the Mulberry brand was “about to gain a whole lot more profile” as it finds itself on the cusp of a potential takeover battle.
Mulberry said the net proceeds from the capital raising would be used to strengthen its balance sheet and enable Andrea Baldo, its new chief executive, to execute his strategy for the troubled leather goods seller.
Baldo, the former chief executive of Ganni, a Danish fashion label, was named as Mulberry’s new boss in July after Thierry Andretta, its former chief executive for almost a decade, was ousted for failing to turn the brand around.
Baldo said he had been working closely with the Mulberry teams in the UK and internationally “to drive swift, decisive actions. In the short term, we are focused on enhancing operational efficiency and implementing targeted product, pricing and distribution strategies to regain market share in our core market of the UK”.
A takeover of Mulberry by Mike Ashley’s Frasers Group would represent a dramatic shift in ownership style for the luxury British brand.
Since 2003 the leather goods seller has been majority-owned by the Singapore-based billionaire Ong Beng Seng, 80, and his wife Christina Ong, 76, who have a combined net worth of about $1.7 billion.
With his wealth primarily tied to Hotel Properties Limited (HPL), which owns luxury hotels and retail investments, Ong has a reputation for long-term, strategic investments in high-end brands. Despite his vast influence, he remains media-shy and operates behind the scenes, quietly building a portfolio of premium assets such as Mulberry. His wife Christina is known as the Queen of Bond Street thanks to her carefully crafted relationships with the cream of the luxury sector.
Ashley, 60, the founder of Sports Direct (now Frasers Group) and worth about £3.79 billion, is almost the polar opposite in style. Known for his outspoken personality, Ashley has a history of making bold, high-profile moves, especially when it comes to buying up struggling British retail brands.
Where Ashley goes, controversy often follows. In 2021 it was the tracksuit-and-trainer king’s sale of Newcastle United to a Saudi-backed consortium that generated negative headlines. This year, Ashley has found himself in a tussle with Mahmud Kamani, the co-founder of Boohoo, over the fast-fashion group’s falling share price.
Frasers has started to push into the premium and luxury sector with its Flannels fascia, but most of its earnings come from its more affordable sport division. If Ashley owned Mulberry, he might take a more aggressive, hands-on approach, potentially expanding the brand into more accessible or mainstream channels.
His past acquisitions have sometimes led to concerns about diluting the exclusivity of brands, as his focus tends to be on increasing sales rather than preserving luxury status.