Mulberry, the struggling UK luxury brand, has rejected a proposed takeover bid by Mike Ashley's Frasers Group.
Frasers, which is majority owned by the tycoon and best-known for its Sports Direct brand, made an offer on Monday that valued Mulberry at £83m.
The company is the second largest shareholder in Mulberry, with a 37% holding.
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It claimed to be acting to prevent "another Debenhams situation" after apparently being kept in the dark over a move by Mulberry, last Friday, to raise cash.
Mulberry, best-known for its handbags, has been battling weak demand amid a global luxury slump and had revealed last week that it had fallen sharply into the red during its last financial year as a result of the challenges.
Its annual accounts had contained a warning that the downturn had resulted in a "material uncertainty which may cast significant doubt on the group and parent company's ability to continue as a going concern" if it persisted.
Mulberry responded on Tuesday by declaring that the proposal by Frasers, which has been run by Mr Ashley's son-in-law Michael Murray since 2022, did not recognise the company's "substantial future potential value".
The bid, it also said, did not have the support of its majority shareholder.
Mulberry said it had discussed the approach with Singapore-based Challice - controlled by billionaire Ong Beng Seng and his wife Christina.
The firm put faith in its recently appointed chief executive Andrea Baldo to drive a turnaround and said it would stick with the plans for a capital raising.
This "provides the company with a solid platform to execute a turnaround and, ultimately, to deliver best value for all Mulberry shareholders," it concluded.
Frasers' approach, worth 130p per share, valued the stake in the company it does not own at £52.4m.
Under UK takeover rules, it has until 28 October to make a firm offer for Mulberry or walk away.
Dan Coatsworth, investment analyst at AJ Bell, said of the battle: "Ashley's blood is likely to be boiling at being kept out of the loop by Mulberry with its fundraising plan last Friday, given that Frasers owns 37% of the company.
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"Ashley may no longer run Frasers but as the majority owner of the retail conglomerate you can be sure he's active behind the scenes. The stake in Mulberry was also acquired when he was in charge of Frasers, so he's likely to take the snub personally.
"Mulberry's fundraising looks dangerously close to being a cash call simply to keep the lights on. Frasers has now stepped in with a possible takeover offer - it's not a particularly generous one, but this situation doesn't deserve it."
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