Mike Ashley weighs up bid for Mulberry

Mike Ashley's Frasers Group, which owns Sports Direct and House of Fraser, buys 4.3m shares in the handbag maker taking its stake to 37pc

Mike Ashley's Frasers Group is considering a takeover of Mulberry after increasing its stake in the luxury handbag maker to more than a third.

Frasers, which owns Sports Direct and House of Fraser, has bought 4.3m Mulberry shares at 150p each from Icelandic bank Kaupthing to increase its ownership of the company to 37pc.

Mr Ashley’s retail empire first took a stake in Mulberry in February, before more than doubling its holding to about 29pc earlier this month.

Takeover rules require any group with a stake of more than 30pc in a business makes a formal cash takeover offer. 

However, the Takeover Panel said on Thursday that a mandatory bid was not required because Mulberry’s largest investor, Singaporean billionaire Christina Ong, already owns 56pc of the company. 

Nicknamed the "Queen of Bond Street" due to the number of properties she owns on the street, Ms Ong took control of Mulberry in 2003 just months after the firm's founder Roger Saul was ousted as chairman and chief executive. 

Despite her majority stake, the regulator said has maintained that Frasers must confirm whether it intended to make a takeover bid by Dec 17 in what is known as a “put up or shut up” rule.

Otherwise known as the "Cadbury law", the rule was introduced after Kraft’s takeover of Cadbury in 2010 in an effort to protect shareholders in companies that become the targets of hostile takeovers.

The increased investment in Mulberry comes as part of Mr Ashley’s ambitions to take his retail group more upmarket. Frasers also acquired a small stake in Hugo Boss this year.

Earlier this year, Mulberry revealed plans to cut up to 500 jobs as social distancing measures and a dramatic fall in the number of foreign tourists during the pandemic hammers sales.

Last month, chief executive Thierry Andretta warned the luxury sector faced "a very uncertain future" as Mulberry posted a slump in sales and a £48m loss for the year to March.