Minerva unmasked as £125m bidder for Allders chain

Click to follow
The Independent Online

Minerva has owned up to being the bidder that is after Allders, the department store chain.

Minerva has owned up to being the bidder that is after Allders, the department store chain.

The property group, which is already the chain's largest shareholder, said it was considering a bid of 160p a share for the 75 per cent of Allders it does not already own, valuing the company at about £125m. Allders, which issued a profit warning in September, is recommending the possible cash offer.

Analysts said Minerva's move was not a retail play but hinged around a property development in Croydon, where Allders is based, that the property group is working on. "Minerva probably has some other agenda which is based on leveraging the property assets. I can't see any reason why it would want to get involved in running a retail business," said Mark Charnock, an analyst at ING Financial Markets.

In a joint announcement, the companies said they had "reached agreement on the principal terms of a possible recommended offer". They stressed that talks were at a "very early stage" adding: "No assurance can be given that any offer will be made for Allders." Shares in the chain, which have soared since bid speculation begun a week ago, closed up 6p at 150p. Minerva shares fell 6 per cent to 165p.

Minerva struck a deal with Allders three years ago to acquire its flagship store in Croydon, Surrey for £50m, though the transaction depends on obtaining planning permission for the 1 million sq ft shopping complex that it is developing in the centre of Croydon, with Allders as the anchor tenant.

Minerva said any offer would be made through a new company, which would be predominantly financed by "a significant financial institution", although it declined to name which one. "Minerva's own financial exposure would be modest ... [our] investment would be financed out of existing cash resources," the property group said.

Allders has 44 stores, 20 of which are out of town and focus on home furnishings. The Croydon store accounts for the bulk of its freehold properties. Other possible bidders had been thought to include Baugur, the Icelandic retailer that recently tried and failed to build a stake in Allders, and House of Fraser, which tried to merge with the chain three years ago.