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LONDON-Quoted property company Minerva has confirmed it is in talks for a £124.5 million ($196.5 million) takeover of department store operator Allders.

The property company already owns a 25% stake in the Croydon-based group but has now said that it had agreed the terms of a possible offer with Allders. But Minerva warned that discussions were at an early stage and that no assurances could be made that a final offer would be made.

Rumours were sparked yesterday when Allders said it had received a takeover approach.Shares in Allders closed 16% ahead last night and rose another 7% to 153.5p today following confirmation of Minerva’s interest.

The terms of the deal will see shareholders offered around 160p a share, although the payment of a final dividend will take the figure up to 164.4p. The offer is likely to be made through a newly established company in which Minerva would have a majority stake. Minerva said the operation would be backed by a “significant financial institution” and that meant Minerva’s financial exposure would be “modest”.

Allders has been the subject of takeover speculation ever since issuing a shock profits warning two months ago after poor summer sales. Its shares fell 42% below their 174p high for the year.

The retailer runs 44 stores in the UK and has split its estate into three concepts, department stores, out of town and Allders at Home. Not only is Minerva the biggest shareholder in the retailer, but they are also working together on a large redevelopment project in Croydon.

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