Mellor bid faces scrutiny by Panel

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Minority shareholders in the antiques dealer Partridge Fine Arts have called on the Takeover Panel to investigate a lowball bid for 51 per cent of its shares from a dealership backed by David Mellor, the former arts minister.

Private investors, who risk being stuck with a stake in an unlisted private company, want the City watchdog to look into the unusual offer from Amor Holdings, which has secured £4m of funding from the antiques powerhouse Christie's.

In a letter to the Panel, Peter Brown, a retail investor, said he was unhappy with Amor's proposal to auction off stock owned by the Bond Street-based antiques house to help fund its offer. "It is unclear what stock will be chosen to be sold and it is equally unclear how the base value of that stock is to be arrived at in order to establish how much 'profit' has been made which in turn will finance the auction-related consideration," Mr Brown said.

Earlier this year, Partridge Fine Arts slashed the value of its stock by more than one-third to around £16m, raising questions over its ability to value its existing stock.

The only hope for minority shareholders is that Frank Partridge, the son of the company's chairman who quit the group last year, will mount a rival bid. He has said he is "optimistic" of raising funding to trump Amor's recommended bid, which has the support of his father's 60 per cent shareholding.

Tom Russo, an institutional investor at the US-based Gardner Russo & Gardner, said: "The bid seems deficient. It fails to reward private shareholders for the considerable value still available in the group's extensive property and inventory."

Amor plans to take the company private but only buy 51 per cent of the stock for 35.4p a share.