One of Bonmarché’s biggest shareholders has sold its stake to Philip Day in a move that increases the retail billionaire’s chances of gaining control of the business.

Cavendish Asset management sold its 10.8% stake in the retailer to Day for £600,000.

The sale comes after Day withdrew his bid for the company following poor trading.

Day’s investment vehicle Spectre Holdings purchased 52.4% of Bonmarché shares in April, triggering a takeover bid.

Spectre offered to buy the remainder of the shares for 11.45p; however, the fashion chain’s directors unanimously recommended shareholders reject the offer which they said “materially undervalues” the company.

Following a tough first quarter the board has now made a U-turn on its decision to reject the offer and said it was now “more attractive in the short term”.

Last week Spectre said it is closing its offer to buy the remaining shares at 11.45p because of its uncertain future.

The fashion retailer posted an 8.1% fall in total sales year on year in the 13 weeks to December 29 after issuing a profit warning last November.

Bonmarché had previously expected to make a pre-tax profit of about £5.5m, but now believes it will only break even and could even lose as much as £4m.

Day’s investment vehicle must give 14 days’ notice before closing the offer and until that time it is obliged to buy any shares that become available.

The offer will close on July 12.

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