Frasers Group have announced they are not going to make a takeover bid, in the next six months, to buy out Mulberry. In the meantime, the British leather goods brand faces loss as 15 million pounds have gone up in smoke at the Stock Exchange market.
In the next six months
Frasers’ takeover to control Mulberry has stopped. The group, currently engaged in negotiating several acquisition deals, have announced they are not going to make a takeover bid, in the next six months, to buy out Mulberry, like we said earlier. Only a “physical change of circumstances” might possibly lead the group to change course. More specifically, either a takeover bid submitted by a competitor or an agreement with Mulberry board of directors. Considering the decision made by Mike Ashley, chief owner of Frasers Group, financial analysts believe that the company will mostly focus its efforts on the acquisition of Debenhams retail chain. Alternatively, they might target some brands controlled by Arcadia Group.
Facing a fall in value at the Stock Exchange Market
Investors, disappointed to hear the news, have decided to sell Mulberry stocks: consequently, their listing decreased as value dropped by 11%. In summary, as reported by The Guardian, over 15 million pounds have gone up in smoke. Following several deals, Frasers’ shareholdings in Mulberry have now reached around 37%. In compliance with Takeover Panel regulations, when shares held by an investor amount to or exceed 30% of the listed company’s capital assets, the shareholder must submit a takeover bid to totally buy out the business. Yet such rule does not apply in this instance as a company already owns 56.14% of the capital assets. We are talking about Mulberry majority shareholder, namely Challice Limited, a company controlled by Ong Beng Seng and Christina Ong family.
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