Frasers Group has seen its second offer for luxury handbag retailer, Mulberry, valued at £111m, rejected by the firm’s majority shareholder.

The company, which is owned by Mike Ashley and owns a 37% stake in Mulberry, submitted a second bid of 150 pence per share on Friday.

This was rejected by Challice Limited, which owns a 56% stake in the handbag firm.

In a statement, Challice said that it "has no interest in selling its Mulberry shares to Frasers or providing Frasers with any irrevocable or other undertaking".

Frasers first invested in Mulberry in 2020, with its first acquisition offer of £83m coming last month, after the handbag firm stated that it was looking to raise £11m in capital.

This was rejected by Mulberry, saying that capital raising was the "fairest and most effective way of accessing additional equity funds".

Head of money and markets at Hargreaves Lansdown, Susannah Streeter, said that "words of frustration" have been published by both firms, with Challice wanting to see a turnaround in Mulberry’s performance before exploring other options.

She said: "Frasers 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 CEO, Andrea Baldo, a chance to bed in and help revive the brand’s fortunes."

However, shares at Mulberry have increased by 20% following the last offer.

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

Streeter concluded: "There are still hopes for a higher bid to come through but whatever the outcome, the bigger price tag slapped on Mulberry’s has enthused investors and hopes for the brand’s turnaround."

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