Mulberry's majority shareholder has "no interest" in selling its stake in the handbag maker to Mike Ashley's Fraser's Group, despite an increased offer for the business.
Challice, which is owned by Singaporean businesswoman Christina Ong and husband Ong Beng Seng, owns 56.4% of the Somerset-based company. Its stake in Mulberry means it has the power to reject any further takeover bids by Frasers.
The announcement by Challice follows a second offer by the Sports Direct owner for Mulberry on Friday, valuing the struggling business at £111m. An earlier bid for the brand was rejected after the fashion firm said it did not "not recognise the company’s substantial future potential value”.
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In response to the second offer, Challice said: "Challice believes that it is an inopportune time for Mulberry to be sold and particularly regrets the distraction that the possible offer is bringing to the company and its management team at this time.
"Challice has no interest in either selling its Mulberry shares to Frasers or providing Frasers with any irrevocable or other undertaking with regards the possible offer."
Frasers Group increased its stake in Mulberry last week after its takeover bid was rejected, subscribing to 3.9 million shares at 100 pence per share, meaning it now holds a 37.3% interest in Mulberry.
On Monday, October 14, Mulberry confirmed the board was working with advisers to consider the company's position and said it would "provide a further announcement in due course".
"The board highlights that there can be no certainty that an offer will be made for the company nor as to the terms on which any such offer might be made," Mulberry said in a statement to the stock market.
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The brand, which was founded by Roger Saul in Somerset in 1971, has put its faith in recently appointed chief executive Andrea Baldo, who is hoping to drive a turnaround for the loss-making business.
Under takeover rules, Frasers has until October 28 to make another offer for Mulberry or abandon its takeover attempt.