One of Bonmarché’s largest shareholders has lashed out over the fashion retailer’s U-turn on a £5.7m takeover bid by billionaire Philip Day.

Cavendish Asset Management, which is Bonmarché’s third-largest investor with a 10.8% stake, said it was “disgusted” with the board’s decision to row back on its opposition to the offer.

Bonmarché initially rejected Day’s bid, tabled through his Dubai-based Spectre Holdings, less than two months ago.

At the time, the embattled chain’s board insisted the offer “materially undervalues Bonmarché and its prospects”.

But yesterday it said poor trading during its first quarter, which it put down to “continued weakness in the underlying clothing market” and a “lack of seasonal weather”, had made Day’s bid look “more attractive”. It urged its shareholders to accept the offer.

The retailer’s share price crashed more than 25% to 11.4p following the dramatic change in position.

Cavendish fund manager Paul Mumford told the Daily Mail: “We’re disgusted Bonmarche has simply capitulated without consulting majority shareholders or even putting up a semblance of a fight.

“It seems management was looking at the short-term picture rather than long-term prospects.”

Edinburgh Woollen Mill tycoon Day made the offer at the start of May having taken his shareholding in the business to 52.4%.

Under Takeover Code rules, any investor with a 30% stake is required to make a mandatory takeover bid.

Day has amassed an estimated fortune of £1.2bn, which has been built by snapping up a raft of struggling retailers.

His growing stable of high street names includes the likes of Jaeger, Peacocks and Austin Reed.