Mulberry Group (AIM:MUL) shares swung 20% higher in early trading after the board decided to speak to advisers after its largest shareholder said it was not interested in the takeover offer from its second-largest shareholder, Frasers Group.
Frasers, the sports and fashion retailer founded by Mike Ashley, made an offer of 150p per share on Friday evening, a large premium to the 100p at which the handbag maker raised £10 million earlier in the week.
Over the weekend, Mulberry's majority shareholder Challice Ltd, which owns a 56.4% stake, said it "has no interest in either selling its Mulberry Shares to Frasers or providing Frasers with any irrevocable or other undertaking".
FTSE 100-listed Frasers, which maintained its near-37% stake in the fundraising, had made an initial takeover bid at 130p per share at the end of last month, which was rejected as it did not recognise the "substantial future potential value of Mulberry".
Frasers said it was "clear that there is no current commercial plan, turnaround or otherwise" at the handbag company and it has "significant reservations" that the £10 million of new funds will be enough to support the business through the near to medium term.
In a statement this morning, Mulberry's board said it is "working with advisers to consider the company's position".
Frasers has a put-up-or-shut-up deadline of 28 October.
Shares in Mulberry were at 126p after just over half an hour of trading on Monday, up 12% on the day. Frasers was up 0.25% at 813p.
** Update: Adds share prices **