Mulberry's majority shareholder refuses sale to Frasers

The majority owner of Mulberry has called on Mike Ashley's Frasers Group to abandon its takeover interest in the struggling luxury brand.

Singapore-based Challice, which has a 56% stake, released a statement on Sunday which declared it had "no interest" in selling to Frasers - already the second-largest investor in Mulberry with 37%.

Frasers, which is run by Mr Ashley's son-in-law Michael Murray, had raised its bid for the handbags-to-belts maker on Friday, valuing the loss-making firm at £111m.

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Its original offer of £83m was rejected by Mulberry on value grounds.

At that time Frasers, best-known for its Sports Direct chain, claimed to be acting to prevent "another Debenhams situation" after being kept in the dark over a move by Mulberry to raise cash.

Challice said in response to the second bid: "Challice believes that it is an inopportune time for Mulberry to be sold and particularly regrets the distraction that the possible offer is bringing to the company and its management team at this time.

"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."

Under City takeover rules, Frasers has until 28 October to make a firm offer for Mulberry or walk away.

"Challice hopes that by making its position clear, Frasers will be encouraged to announce that it does not intend to make an offer for Mulberry," the Challice statement concluded.

Mulberry added, in a statement to the stock exchange, that it was working with advisers to consider the company's position on the bid.

Mulberry, like rivals across the luxury-focused sector, has been battling weak demand globally.

It revealed last month it had fallen sharply into the red during its last financial year as a result of the challenges.

Annual accounts contained a warning that the downturn had 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 it persisted.