Mulberry, the British luxury fashion brand, has received an increased £111 million takeover bid from Mike Ashley's Frasers Group, with the company's majority shareholder declaring it has "no interest" in selling its shares.

Challice, a group controlled by Singaporean entrepreneurs Christina Ong and her husband Ong Beng Seng, which owns 56 per cent of Mulberry, called on Frasers to abandon its takeover plans. The majority stakeholder stated that the bid came at an "inopportune time" for the struggling brand.

A spokesperson for Mulberry told Retail Systems that Mulberry has not rejected the offer, that it is considering it’s position and will provide a further announcement in due course.

Frasers Group, which already owns a 37 per cent stake in Mulberry, raised its offer to 150p per share on Friday, up from an earlier bid of 130p per share that valued the company at £83 million. The revised offer represents a 50 per cent premium on Mulberry's recent fundraising price.

The increased bid came after Mulberry reported a £34 million pre-tax loss for the year ending March 2023, prompting the company to raise additional funds. Frasers Group, which owns Sports Direct and House of Fraser, justified its takeover attempt by stating it would "not accept another Debenhams situation where a perfectly viable business is run into administration".

Challice welcomed Frasers' participation in Mulberry's recent £10.75 million emergency share placing, where the Sports Direct owner acquired £3.9 million of new shares. However, the majority shareholder made its position clear, stating: "Challice has no interest in either selling its Mulberry shares to Frasers or providing Frasers with any irrevocable or other undertaking with regards the possible offer."

The Mulberry board had previously rejected Frasers' initial £83 million bid on 1 October, saying it "does not recognise the company's substantial future potential value". The luxury retailer believes that the recent appointment of Andrea Baldo as chief executive officer, along with the emergency fundraising, "provides the company with a solid platform to execute a turnaround".

Commenting on the news, Susannah Streeter, head of money and markets at investment firm Hargreaves Lansdown said: "It’s still handbags at Mulberry, with Challice, the largest shareholder batting away the latest bid from Frasers Group. Mike Ashley’s company had significantly sweetened its bid but the offer of 150p a share, valuing the company at £111 million has been rejected by the group controlled by Christina Ong and husband Ong Beng Seng. Getting their buy-in is crucial given that they control a 56 per cent stake in the company.

"Words of frustration have been pumped out from both sides. Frasers Group has clearly lost so much faith in the current direction of the company, it’s fearful of collapse and has warned it does not want to see another Debenhams style scenario play out. But Challice is also clearly exasperated by the relentless focus, wanting to give the new chief executive officer, Andrea Baldo a chance to bed in and help revive the brand’s fortunes."

Under UK takeover rules, Frasers Group has until 28 October to make a firm offer for Mulberry or withdraw its bid. The outcome of this high-stakes negotiation could significantly impact the future of the iconic British fashion brand, which has struggled to compete against larger international luxury labels in recent years.

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