Mulberry, one of Britain’s most iconic luxury brands, has turned down an £83 million takeover bid from Mike Ashley’s Frasers Group, stating it did “not recognise the company’s substantial future potential value.”

The board of Mulberry said it had carefully considered the offer, consulting with its majority shareholder, Challice, which holds 56.1% of the company and is controlled by Malaysian billionaire Ong Beng Seng and his wife, Christina.

In a stock exchange announcement, Mulberry expressed confidence in its recent appointment of Andrea Baldo as CEO, believing it provided a “solid platform” for a turnaround that would deliver the best value for all shareholders. The brand’s shares rose 4.8% to 130p following the rejection.

Frasers Group, which made a 130p-per-share bid after a surprise £10 million rights issue, has yet to respond. The bid represented an 11% premium to Friday’s closing price. The Sports Direct owner argued that it was the “best steward” to restore the struggling leather goods brand to profitability, and expressed concerns about Mulberry’s ongoing financial challenges, citing its auditor’s warning about “material uncertainty” related to the company’s ability to continue as a going concern.

Frasers was also frustrated by the timing of the rights issue announcement, calling the lack of engagement “untenable” for Frasers and other minority shareholders. Mulberry, which recently reported a £34 million pre-tax loss, plans to use the fresh capital to stabilise its balance sheet and allow Baldo to implement his strategy for the brand.

Under UK takeover rules, Frasers has until 5pm on 28 October to either make a firm offer or walk away. If it chooses to walk away, it will not be able to make another bid for six months unless another offer is tabled by a rival bidder.

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Mulberry rejects £83 million takeover bid from Frasers Group