LONDON (ShareCast) - (Sharecast News) - Mike Ashley's Frasers Group said on Wednesday that it was abandoning its pursuit of luxury handbag maker Mulberry.

The news came a day after Mulberry announced that it had rejected a second takeover proposal of £111m, or 150p a share, saying it was "untenable".

Mulberry's rejection of the offer - up from a previous proposal of 130p a share - came after major shareholder Challice said it had no intention of selling its 54% stake to Frasers.

Frasers said it had become increasingly concerned over the governance of Mulberry, the apparent lack of commercial plan against a backdrop of increasing market headwinds and the financial position it finds itself in.

It said: "Whilst the response announcement is a disappointing outcome, Frasers remains a long-term supporter of the well-loved British brand, Mulberry.

"Frasers continues to believe that market headwinds, and a clear lack of commercial plan, place the company in a very difficult financial position. Frasers welcomes the presentation of a credible plan in the near term."

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