Mike Ashley's Frasers Group makes bid for Mulberry

Luxury handbag maker Mulberry has received a takeover approach from Mike Ashley's Frasers Group.

The offer values Mulberry, which has seen sales fall sharply following a downturn in the luxury sector, at £83m.

Frasers Group, which owns several chains including Sports Direct, Flannels and Evans Cycles, already holds a 37% stake in the firm.

Its takeover move followed an announcement by Mulberry on Friday that it was seeking to raise £10m to bolster its finances.

But in a statement on Monday, Frasers said it had only been made aware of this plan to raise funds “immediately prior to its announcement”.

"Given this total lack of engagement, we believe the status quo to be an untenable position for Frasers and the other minority holders of Mulberry shares," it said.

Frasers added that with its "leading retail expertise and presence... we believe Frasers to be the best steward for returning Mulberry to profitability".

"As a 37% shareholder, Frasers will not accept another Debenhams situation where a perfectly viable business is run into administration."

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Mike Ashley’s frustration with Mulberry is plain to see.

"Keeping it quiet indicates that the [Mulberry] board didn’t want to give Frasers the early option of owning an even bigger chunk of the company.

"However, investors may also be losing patience, given that Mulberry’s shares have fallen by 52% over the past year."

Ms Streeter said Frasers Group had already taken steps to "move upmarket", such as increasing its stake in Hugo Boss.