Mulberry has rejected Frasers’ second offer of £111m to acquire the luxury handbag firm, after its majority shareholder turned down the deal last week.

Challice Ltd owns 56.4% of the British handbag company, with Frasers Group, which is owned by Mike Ashley, holding a 37% stake in the company.

In a statement, Mulberry said that the bid, valued at 150 pence per share, is "untenable" and that the company should "focus its attention on driving the commercial performance of the business".

The initial £83m offer made by Frasers in late September came after Mulberry said that it was looking to raise £11m in capital.

However, Mulberry rejected the bid, stating that capital raising was the "fairest and most effective way of accessing additional equity funds".

On the £111m offer by Frasers, Challice said that it had "no interest in selling Mulberry shares to Frasers or providing Frasers with any irrevocable or other undertaking".

Under takeover rules, Frasers now has until 5pm on 28 October to make an offer for Mulberry or walk away from the deal.

Investment director at AJ Bell, Russ Mould, said: "Frasers was never going to win the takeover battle for Mulberry with a bigger shareholder blocking its way.

"The debate now shifts to whether Frasers will keep its stake in the business or whether it will push for Challice to buy it out and take the business private. There seems little point in Mulberry remaining a listed company if Frasers loses interest after the bid.

"Frasers has made it perfectly clear that it is worried about the path Mulberry is taking, saying there is ‘no current commercial plan, turnaround or otherwise’. Given that Frasers’ help has effectively been spurned by Mulberry rejecting its bid, it’s hard to see the Sports Direct owner wanting to hang around for long."

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