Mulberry rejects takeover approach from Mike Ashley’s Frasers Group valuing firm at £83m

Mulberry said it had discussed the approach with its majority shareholder, Singapore-based Challice, which is controlled by billionaire Ong Beng Seng and his wife Christina.

The Somerset-based firm put faith in its recently appointed chief executive Andrea Baldo to drive a turnaround and said it would also stick with the plans for a capital raising.

It said this “provides the company with a solid platform to execute a turnaround and, ultimately, to deliver best value for all Mulberry shareholders.”

Mulberry added: “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.”

The company said it would instead look to hold talks with Frasers over a “pro rata participation” in the cash-call.

Frasers Group, which owns Sports Direct and already has a 37 per cent stake in Mulberry, said on Monday it had put forward an approach worth 130p per share, valuing the stake in the company it does not own at £52.4m. It comes after Mulberry said on Friday that it needed to raise more than £10m after slumping to a significant loss for the past year.

The luxury fashion firm reported a £34.1m pre-tax loss for the year to March 31, compared with a £13.2m profit a year earlier.

It has said sales dropped more sharply over the spring and summer, with group revenues plunging 18 per cent over the past 25 weeks as wealthy shoppers reined in spending.

Within the accounts, Mulberry warned that the downturn has resulted in a “material uncertainty, which may cast significant doubt on the group and parent company’s ability to continue as a going concern” if its struggles continue.

Frasers said it was pushing to take control of Mulberry partly due to these concerns about the long-term viability of the business.