Institutions revolt over Allders deal

PDFM, the powerful City fund manager, is understood to be at the forefront of a shareholder revolt against Allders' acceptance of a pounds 130m bid for its airport duty-free operations from BAA, despite a higher offer from Swissair.

In one of the more bizarre City battles this year, Swissair has tabled a pounds 145m rival offer, which BAA has rejected but which it still intends to put to long-suffering Allders shareholders at an extraordinary general meeting on 10 June.

Criticism of the department stores group is also likely to intensify after it announced a halving of first-half profits to just pounds 8m late on Friday after the market closed.

PDFM, owned by Swiss bank UBS, is the UK's second biggest fund manager and owns a key 14 per cent stake in Allders.

No one at its City headquarters was available for comment this weekend, but sources close to the bid say it is one of a number of investors to have voiced grave concerns.

"They and other institutions are up in arms. You can expect more action this week. At the moment shareholders are saying to Allders 'get your head screwed on'," one source said.

The firm opted for BAA's bid for its 222 strong Allders International chain, Europe's largest, a week ago, claiming Swissair had set down too many conditions. The market speculated, too, that BAA had it over a barrel, as it actually owns Allders shops at its seven UK airports. Swissair has since dropped any conditions and insists it is unworried by BAA's leverage.

"The Swissair offer was made in the knowledge that BAA was threatening to withdraw the shop licences. That doesn't matter a damn now to Allders," a spokesman said.

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