Laura Ashley’s board of directors has announced that it will not engage in any deal with private investment company Flacks Group, stating that its acquisition offer substantially undervalues the business.

Flacks Group offered around £0.02 pence in cash for each Laura Ashley share, valuing the retailer at £20m ($26.62m).

This move followed the announcement of Laura Ashley’s full-year financial report last week, which reported a drop in revenue from furniture and decorating products.

“Opportunistic and unsolicited offers that are speculative in nature, and playing to a short-term market that creates unnecessary volatility to the share price, are not welcome.”

Laura Ashley reported sales of £123m in the second half of 2018, representing an 8.7% decline compared to the same period in 2017.

Laura Ashley chairman Andrew Khoo said: “Since assuming the role of Chairman recently, I would like to reiterate that I hold a long-term view of the Group.

“Opportunistic and unsolicited offers that are speculative in nature, and playing to a short-term market that creates unnecessary volatility to the share price, are not welcome.

“However, we will not be distracted from our focus on the business fundamentals as we continue to transform the Group into a true lifestyle brand.”

The board noted that it is expecting profitable and sustainable growth in the future to create long-term value for its shareholders.

It also encouraged all shareholders to take no action against the offer.