Mulberry Group plc has rejected an £83 million buyout bid from Mike Ashley’s Frasers Group. 

The luxury handbag and accessories maker said it would continue with its plan, announced last week, to raise money by selling new shares.

“The Board has considered carefully the Possible Offer, along with its financial and legal advisers, and has also consulted with and sought feedback from Challice Limited, the Company’s 56.1% majority shareholder,” Mulberry said in a statement. 

“The Board believes that the combination of the recent appointment of Andrea Baldo as CEO alongside the recently announced Subscription and Retail Offer provides the Company with a solid platform to execute a turnaround and, ultimately, to deliver best value for all Mulberry shareholders.

“In light of this, the Board has concluded that the Possible Offer does not recognise the Company’s substantial future potential value. In addition, the Board has been informed that Challice is supportive of the Company’s strategy and has no interest in supporting the Possible Offer. As a result of the above, the Board has rejected the Possible Offer.”

Mulberry said it would carry on with its plan to sell new shares and said it “looks forward to engaging further with Frasers regarding a pro rata participation in the Subscription.” 

In accordance with City rules, Frasers has until October 28 to announce a firm intention to make an offer for Mulberry or walk away.

Frasers first invested in Mulberry in February 2020 and grew its holding to about 37% that same year. Since then Mulberry has struggled with rising costs and declining consumer spending. Auditors noted a “material uncertainty related to going concern” in their latest annual report. 

Frasers’ bid for the rest of Mulberry it did not already own was worth 130p per share, valuing Mulberry at about £83 million overall.