Fine art firm forced to agree lowball bid from David Mellor

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The Independent Online

An antiques company backed by David Mellor, the former Conservative arts minister, has offered to take control of its rival Partridge Fine Arts for less than the company's market valuation.

John Partridge, the chairman, 76, put the family business up for sale in February. Yesterday he said he had "no attractive alternative" to accepting the lowball £4m offer because the company is running out of cash.

Mr Mellor is a director and 20 per cent shareholder of Amor Holdings, a company backed by the antiques powerhouse Christie's, which was set up to bid for Partridge Fine Arts on behalf of the porcelain dealer Mark Law.

Amor has offered to purchase 51 per cent of the New Bond Street-based group for 35.4p a share, roughly two-thirds of the stock's value before the offer was made. Shareholders were unimpressed and shares in the group plunged 11p to 44.5p. Tom Russo, of Gardner Russo & Gardner, a US investment firm, said: "This has to be the opening price for discussions because it overlooks the considerable value of the group's real estate."

Amor has said it may up its offer depending on how much cash it raises from auctioning off Partridge's stock at Christie's. It intends to delist the company if its offer succeeds. The Partridge family, which founded the company at the turn of the 20th century to deal in Edwardian British and French furniture and silver, has pledged its 60 per cent shareholding in support.

Mr Partridge's son, Frank, quit the company last year, leaving him with no obvious successor. Given the group's uncertain future, no outsiders have joined the board since then.

Mr Law defended Amor's offer as being better than minority shareholders would have received had Mr Partridge opted to liquidate the company. "They are going to receive a cash payment now and may receive substantially more," he added.

Amor has agreed to a cash injection of £500,000 to tide Partridge over during the next few months. It has four years to make a deferred offer to buy the remaining shareholders out of the privately held vehicle.

Richard Ratner, a retail analyst at Seymour Pierce, called the deal "lousy" for Partridge's 350 external shareholders. He advised minority investors to sell.

Christopher Jemmet, a director of Friends Provident and deputy chairman of F&C Asset Management, owns 20 per cent of Amor, with Mr Law owning the remainder.

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