(Reuters) -British sportswear and apparel retailer Frasers Group walked away from its attempts to buy Mulberry on Wednesday, citing a lack of engagement from the British luxury brand’s board after two proposals were rejected.
Frasers did not get the backing of Mulberry’s top investor Challice – controlled by billionaires Christina Ong and Ong Beng Seng – in its bid to buy out the loss-making brand.
The retailer, owned by British entrepreneur Mike Ashley, renewed calls for its representative to be appointed to the Mulberry board, saying it now hopes the board will engage positively on a Frasers appointee.
Mulberry, known for its leather handbags and belts, rejected Frasers’ second proposal worth 111 million pounds ($143.7 million) on Tuesday, saying it was “untenable”.
Frasers, Mulberry’s second-largest shareholder, said it has become increasingly concerned over the governance of the brand, the apparent lack of a commercial plan against a backdrop of increasing market headwinds and its financial position.
Frasers also said it would not like to see Mulberry exclusively engage with top shareholder Challice in private on “significant matters”, including a recent share subscription by Challice.
Challice subscribed to 10 million Mulberry shares in an offering in October, where Frasers also bought about 4 million shares, slightly raising its stake to between 36.9% and 37.3%.
Shares in Mulberry were down 6.5% as of 1337 GMT. Mulberry has lost over 7% of its value since Frasers first proposed to buy it on Sept. 30.
Challice, which owns a 56% stake in Mulberry, holds three board seats, according to the London-listed firm’s latest annual report.
“Frasers is choosing to bring the offer period to an end, enabling fuller engagement with both Mulberry and Challice on a range of topics,” Frasers said on Wednesday.
Mulberry declined to comment on Fraser’s statement, while Reuters could not immediately contact Challice.
($1 = 0.7723 pounds)
(Reporting by Prerna Bedi and Aby Jose Koilparambil in Bengaluru; Editing by Arun Koyyur, Mrigank Dhaniwala and Sharon Singleton)
