Billionaire Mike Ashley’s Frasers Group has significantly upped its stake in iconic models and collectables firm Hornby.

Hornby, based in Margate, has a portfolio of classic brands, among them the likes of Scalextric, Airfix and Corgi. It remains best known for its model railways.

The latest deal is described as a strategic move by the Frasers Group – which owns the likes of Sports Direct and video game retailer Game – which will see more Hornby product available through its retail outlets.

Frasers now owns 8.9% of Horby – having acquired an additional 11.1 million shares in the company this week. It takes its total holdings in the firm to some 15.1 million shares.

The surprise move saw the Hornby stock market price – which has been flat for some time – rise by more than 30%.

Russ Mould, an analyst at online investment platform AJ Bell told Sharecast News: “Don't expect Frasers to launch a takeover bid for the group.

“Its style is to only acquire when something is on the verge of going bust as it prefers to pay pennies to buy something outright.

“Instead, Frasers is more likely to seek strategic conversations about helping Hornby to improve its distribution and logistics while at the same time realising it might be able to make a few quid by investing in its shares.

"At first glance, it's not the most logical tie-up for Frasers which is best known for sporting equipment and athleisure. Train sets and tracksuits are about as far removed as you can get.

“Yet Frasers has shown a willingness to explore different ways to get consumers to part with their cash. After all, it went from sporting equipment into sofas and computer games which is not a natural path to take.

"The real connection between Frasers and Hornby is the former's Game shops which have progressed from consoles and computer games to now also selling board games, trading cards and toys. Hornby's products sit on Game's shelves and Frasers clearly spots an opportunity to do more."

Mike Ashley – the former owner of Premier League club Newcastle United – is the founder of Frasers Group but stepped down as its CEO two years ago. He handed the reins to his son-in-law Michael Murray. Mr Ashley remains its controlling stakeholder.

Frasers has recently acquired chunks of a number of other household names.

Just last year it acquired a 9% stake in high street electronics retailer Currys and also online fashion retailer ASOS. It also snapped up a 5% stake in Boohoo.com.

Chris Wootton, chief financial officer of Frasers Group, said: "Frasers Group has a vision to build the planet's most admired and compelling brand ecosystem.

“Hornby's portfolio of unique heritage brands are already part of Game's product offer and we look forward to exploring opportunities to further leverage our scale in retail logistics and distribution.

“This is consistent with our strategy of pursuing strategic interests to enhance value for all stakeholders."

Olly Raeburn, chief executive of Hornby, said: "Frasers Group has built a powerful ecosystem through its brand partners, scaled shared services, and distribution channels.

“We have long admired their approach to merchandising and logistics and welcome them as a supportive shareholder.

“We look forward to exploring commercial opportunities in working together to unlock the full potential of Hornby's much-loved brands."

The controlling stake in Hornby – which has a popular visitor centre in Margate which was rebranded as The WonderWorks last year – is owned by the Castelnau Group, part of investment group Phoenix Asset Management Partners.

Hornby is listed on AIM – London’s Alternative Investment Market stock exchange.