The largest shareholder in model maker Hornby has increased its stake in the company to 71% after making a takeover bid.

Phoenix UK Fund – part of Phoenix Asset Management – has “received valid acceptances” for 13.7 million shares in the Sandwich-based toy business.

It comes after it increased its stake in the business above 55% last month following the acquisition of shares held by New Pistoia, which had made a failed bid to oust the company’s former chairman Roger Canham in April.

Under stock market rules, shareholders are required to make an offer for all other shares in a business once their stake reaches 30% or above.

Phoenix made an offer of 32.375p per share but Hornby said the figure, which puts the company’s worth at £27.4 million, “significantly undervalues” the business.

The model maker, which has a visitor centre in Margate and warehouse operations in Hersden, near Canterbury, advised its shareholders not to accept the offer from Phoenix.

It earlier stated it wished to remain quoted on the London Stock Exchange’s junior AIM market, an aspiration which Phoenix said it shared.

In a statement, Hornby acknowleged the increased stake of its largest shareholder but did not comment further.