Wakefield-based fashion firm Bonmarché has rebuffed a cut-price £5.7 million takeover offer from Dubai-based retail entrepreneur Philip Day, saying it “materially undervalues” the company.

Day, who made his fortune with Edinburgh Woollen Mill, recently bought 52.4% of the shares in Bonmarché from a subsidiary of private equity group Sun Capital at 11.445p a share, a discount of 36% to the previous day’s close.

The acquisition of the stake triggered a mandatory offer for the rest of Bonmarché’s shares.

Bonmarché’s share price fell rose slightly on Friday to around to around 15p on the developments. The firm’s shares were trading as high as 122p in the summer of 2018.

In a stock exchange statement on Friday, Bonmarché said: “The board of Bonmarché, having reviewed the announcement of 2 April 2019 concerning the mandatory cash offer of 11.445 pence per Bonmarché share, considers that the mandatory cash offer materially undervalues Bonmarché and its future prospects.

“The board would also like to take this opportunity to inform shareholders that, in light of trading in Q4 of the financial year ended 31 March 2019 and prior to the announcement of the Mandatory Cash Offer, it had been planning a number of cost reduction actions across the group and anticipates starting the implementation of these shortly.

“Further detail on these actions will be announced in due course.

“In view of Spectre’s position as the majority shareholder in Bonmarché, the board has sought to engage with Philip Day to discuss the future plans for the business for the benefits of all stakeholders.

“The board continues to seek positive engagement with Philip Day and looks forward to discussions in due course.

“The board will be writing to shareholders with its formal response to the mandatory cash offer once the offer document has been posted by Spectre.

“In the meantime, Bonmarche shareholders are strongly advised to take no action in relation to their Bonmarché shares.

“Further announcements will be made as and when appropriate.”