Hunter faces stalemate over Allders bid as Minerva hangs tough

Published on Sunday 19 January 2003 00:00

TOM Hunter is facing his toughest test yet if he chooses to bid for department store group Allders after Minerva said it would not sell its 26.2% stake in the next year to anyone other than its own bid vehicle Scarlett Retail.

Property group Minerva has already received acceptances from investors holding 7.5% of shares for its 132m cash bid, and has extended its deadline for shareholder approval until January 29.

On Friday, Hunter bought another 2.2 million shares, taking his stake to almost 11% and a shareholding that he hopes would be large enough to block Minerva’s bid if he chose to.

But Minerva said that it would not submit to a higher bid from Hunter for the shares and said it planned to hold on to its stake for at least a year. However, shareholders appear to be holding out for a higher bid from Scarlett Retail Group, in which it has a 60% stake.

AXA Investment Managers said this week that Minerva’s offer was too low and that an increased offer from either Minerva or from Hunter could emerge.

Hunter, who is already mulling over a hostile bid for House of Fraser, said earlier this month that he "may or may not" make a bid for Allders, which had agreed to Minerva’s offer in December.

The Scottish entrepreneur has a busy week ahead of him, with the Takeover Panel forcing him to make a decision either to table a bid for House of Fraser or pull out by this Friday.

House of Fraser, which owns Barkers of Kensington, Dickins & Jones and Rackhams in Birmingham, has turned down his approach.

It recently produced Christmas trading figures that it claimed showed it was in better health than Hunter had suggested.

It is thought that Hunter is keen to merge Allders with House of Fraser, in order to revitalise the two ailing department store groups.

Alternatively, reports have suggested that Hunter is trying to increase his leverage within Allders without mounting a bid.

Hunter has gradually expanded his stake in Allders in the past month, from 1% at Christmas, to 8% on Thursday and up to 10.8% at the end of the week.

At the close of play on Friday, shares in House of Fraser dropped 1p to close at 77p, while Allders shares were unchanged at 164.5p.