Luxury handbag maker Mulberry has said a sweetened £111 million approach from Mike Ashley’s Frasers Group is “untenable”.

The London-listed fashion firm said its board had decided to rebuff the higher proposed takeover in favour of focusing on boosting its business performance.

It said this also takes into account the view of its largest shareholder, Challice – a group controlled by Singaporean entrepreneur Christina Ong and husband Ong Beng Seng – which has already rejected the approach, saying it does not plan to sell to Frasers.

Mulberry said: “After careful consideration with its advisers… the board is unanimously of the view that the possible offer is untenable and that the company should focus its attention on driving the commercial performance of the business.”

Sports Direct owner Frasers, which owns a 37% stake in Mulberry, tabled an improved £111 million approach on October 11.

It offered to pay 150p per share for the rest of the business it did not already own in order to take control.

It came after a previous 130p per share move, which valued Mulberry at £83 million, was rebuffed earlier this month.

Frasers has been increasing its luxury business in recent years, including building up its stake in Hugo Boss.

But the takeover plans come after Mulberry’s shares have dropped sharply amid a global slowdown in the luxury consumer market due to inflation pressures hitting wealthy shoppers.

Mulberry shares are down more than 30% over the last 12 months and have dropped by more than 22% since the start of 2024.

They fell 4% in Tuesday morning trading.

Frasers now has until 5pm on Monday October 28 to make a firm bid or walk away, under City Takeover Panel rules.

Mulberry looked to appease Frasers following its rejection of the approach, noting the Sports Direct owner’s support for the group.

Mulberry said: “The board acknowledges that Frasers, through its participation in the company’s recent fundraising, has shown itself to be supportive of maintaining the value of the Mulberry brand.

“The board appreciates this and looks forward to further interactions with Frasers in the future.”