Online shopping retailer Findel has won the support of its second-largest shareholder, institutional investor Schroders, in a showdown with Mike Ashley.

Ashley, who is Findel’s majority shareholder, made a formal bid for the retailer last month having struck a supply chain deal with it in 2018.

Findel published a letter from Schroders in which the firm said it “remains supportive of Findel and its management team and the operational and financial progress that the group has made under the leadership of Phil Maudsley and Stuart Caldwell.

“Furthermore, having carefully considered the merits of the offer and the arguments advanced by the board of Findel for its rejection, Schroders agrees with the conclusion of the Findel board that the offer significantly undervalues the future prospects of Findel and as such, our current intention is not to accept the offer on the terms proposed.”

Findel rejected Ashley’s £139m offer last month, saying that the Sports Direct mogul had “significantly undervalued” the group at 161p per share.

The bid came after Ashley purchased a further 6 million shares in Findel, taking his stake in the business to 36.8% and obliging him to make a mandatory bid under the Takeover Code.

However, Findel said its board was “unanimous in its rejection of the offer”.

If successful, Ashley’s bid would have added Findel to the list of companies he has acquired in recent months including, Evans Cycles and House of Fraser.

The retail entrepreneur also owns significant shares in retailers including Debenhams, French Connection and Game and is battling for control of Debenhams, with Ashley agitating to become chief executive of the business.