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View the article online at http://citywire.co.uk/wealth-manager/article/a245636

Scarlett sees red at Allders' shareholders

by Algernon Craig Hall on Jan 30, 2003 at 13:20

Investors in Allders are awaiting Tom Hunter's next move after Scarlett Retail, the firm set up by property group Minerva to mount a £132 million bid for the struggling department store group, issued them an ultimatum.

Only 37.2% of Allders' shareholders have accepted the cash offer which was recommended by the department store in November. Minerva accounts for 26.5% of these and it needs a minimum of 50% to push the deal through.

Scarlett's already extended deadline expired today prompting it to issue a warning: accept the 160p per share offer by the 5 February or risk losing it altogether. 'There is no certainty that the offer will be further extended,' said Scarlett, which is also backed by Terry Green, the former chief executive of Bhs.

Allders (ADS) shares dropped 1.5p to 153p as shareholders wondered what Hunter, the Scottish retail entrepreneur who last week walked away from a bid for House of Fraser, would do next.

Hunter, an associate of Philip Green [no relation to Terry], the Bhs and Arcadia tycoon currently bidding for Safeway, holds a 10.8% stake in Allders. He has steadily built up the stake despite being rebuffed by Minerva over proposals to split up the chain. There had been indications he would have liked to merge Allders with House of Fraser.

Andrew Rosenfeld, chief executive of Minerva and a director of Scarlett, bluntly reminded shareholders: 'There is no other bid.'

Rosenfeld pointed out that the FTSE All Share General Retailers index had fallen by 18.4% since Scarlett's bid was tabled, when Allders shares were languishing at 120.5p.

He also highlighted Allders recent comments that the trading environment remains difficult.

Citywire Verdict:

There is a strong element of pathos around the struggle for Allders. Minerva's stern words to its uncooperative shareholders underlines its frustration after holding a long-term stake for apparently little return. Hunter's failure to stomp up a rival bid and put everyone out of their misery only adds to the sense of disappointment. Still there is good reason to expect further manoeuvring from the Hunter camp to add a bit of sparkle to this sorry saga.

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