ALLDERS department store chain has agreed to a takeover bid in an effort to revamp its image and boost its flagging profits.

The offer has come from Scarlett Retail, a new investment company made up of property giants Minerva, Lehman Brothers investment bank and a management team including Terry Green — former executive of Debenhams and BHS.

Allders, which has stores in Camberley, Basingstoke and Woking, had reported that its profits had halved last year due to poor summer sales.

Following an ambitious expansion and refurbishment scheme, which included a highly publicised Oxford Street store opening, Allders has been the subject of much takeover speculation after this failed to revive its diving profits.

Scarlett Retail said it believed there was “inherent value in the Allders business, which can be more readily realised by taking Allders private”.

The store chain added that weak conditions on the stock market and High Street prompted them to accept the offer, insisting that its modernisation plans were still on track.

Brian Fidler, chairman of Allders, said: “We have also considered the risks of any further weakening in consumer confidence and general trading conditions.”

Under the offer, Allders, which has 44 stores across the country, is valued at £158million or 160 pence per share — a 36% premium to the department store’s value before news of the potential bid emerged in November.

Minerva has already built up a 26% stake in the company and admitted in November that it was interested in making an offer, mainly due to the fact that Allders currently occupies the top spot of a large property development in Croydon.

Critics suggested Minerva overpaid for the project and could now recover some of the costs by leasing the Allders plot to one of the more lucrative offers coming from rivals such as John Lewis.

Terry Green and Phil Cox, both veterans of the investment industry also have a 10% stake in the venture and will take on the positions of chief executive and com-mercial director respectively.

Mr Green, who stepped down as chief executive of BHS in June with a reported pay-off of about £1m, has also been linked to other retail projects.