LONDON (ShareCast) - (Sharecast News) - Mike Ashley's Frasers Group has bolstered its stake in Mulberry Group, it confirmed on Friday, just days after the luxury brand rebuffed a takeover approach from the retailer.

Frasers said it had subscribed to 3.96m shares at 100p per share. AIM-listed Mulberry announced last month it would issue new ordinary shares and launch a retail offer, as the struggling brand looked to shore up its balance sheet by raising £10.75m.

The owner of JD Sports, Evans Cycles and Jack Wills, among others, already owns around 36% of Mulberry.

The extra shares will slightly increase its stake to between 36.9% and 37.3%.

Frasers made a 130p per share offer for under-pressure Mulberry earlier this week, a 11% premium to the closing price last Friday that valued the brand at £83m.

However, Mulberry rejected it, saying that both it and Singapore's Ong family - which holds a 56% stake through its Challice vehicle - believed the brand could turn itself around following the appointment in the summer of new chief executive Andrea Baldo.

Frasers needs to secure the backing from Challice for any bid to succeed.

In response, Frasers criticised the rights offer and argued it was the "best steward" to help return the brand - known for its high-end leather goods - to profitability.

Mulberry posted a £34m annual loss last month, from a £13m profit the previous year, after revenues fell 4%. It blamed a "challenging" second half.

Under the Takeover Code, Frasers has until 28 October to either make a formal offer or walk away, a so-called put up or shut up.

As at 1000 BST, shares in AIM-listed Mulberry were down 8% at 110p, while blue chip Frasers was largely unchanged at 807.5p.

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