Frasers Group has announced that it does not intend to make a formal offer for luxury handbag firm, Mulberry.

The firm, owned by Mike Ashley and has a 37% stake in Mulberry, made two offers to buy the company, the most recent valued at £111m.

These offers came after the handbag firm stated that it was looking to raise £11m in capital last month.

However, the bids were rejected by both Mulberry, which said that capital raising was the "fairest and most effective way of accessing additional equity funds", and its majority shareholder, Challice Ltd.

Following the rejection of these offers, Frasers said that it is no longer looking to acquire the firm.

It added in a statement that it remains a "long-term supporter of the well-loved British brand", but said that "market headwinds, and a clear lack of commercial plan" places the firm in a "very difficult financial position".

It stated it welcomes the presentation of a "credible plan in the near term".

Head of money and markets at Hargreaves Lansdown, Susannah Streeter, concluded: "The tug-of-war over the future of Mulberry has ended with Challice having the shareholder weight to pull the company on its side.

"Without a sharply higher bid to pique enough interest, Challice was never going to budge. The question now is whether Frasers will get a bigger say on the way forward for Mulberry.

"Frasers has made it abundantly clear that it’s been very unhappy with the direction the company has been heading in, fearful of another Debenhams-style collapse which saw its investment evaporate. While this may be seen as a fit of angry bluster, engagement is likely to lead to a better outcome and smoother path to recovery rather than risk continual sniping from the sidelines."

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