Mulberry Group plc said it is working with advisers to consider a response to Frasers Group, which made a second offer to buy the handbag-maker last week in a deal valuing Mulberry at £111 million overall. 

“The Board is working with advisers to consider the Company’s position and will provide a further announcement in due course,” the company said in a statement. 

Chances of a deal being struck declined over the weekend, as investor Challice Limited, which owns 56.4% of Mulberry’s shares, said it “has no interest in either selling its Mulberry Shares to Frasers or providing Frasers with any irrevocable or other undertaking”.

Challice is the investment vehicle of Singapore-based billionaire Ong Beng Seng.

“Getting their buy-in is crucial, given that they control a 56% stake in the company,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“Frasers Group 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.”

“Nevertheless, shareholders have been enthused by this latest turn of events, with shares climbing 20%, to reflect the improved offer, and the announcement by the board that its working with advisers to consider the company’s position. 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.’’

Mulberry shares rose 12% on the London Stock Exchange.

Under City rules Frasers, which already owns about 37% of Mulberry shares, has until 28 October to make a firm offer for Mulberry or walk away.