Fraser-Allders tie-up in store

HOUSE of Fraser has allowed Allders boss Terry Green to have a peep at its books, signalling it is only a matter of time before the two retailers merge.

The Daily Mail has revealed that last month Fraser's boss John Coleman agreed to give Green and his backers Minerva access to confidential company information after they made a bid approach.

City sources say they offered more than 110p per Fraser share, valuing the group at £260m. Coleman deemed the price worthy enough to enter into serious talks. Fraser closed unchanged last night at 93 1/2p.

Green and his team conducted four days of due diligence on Fraser's books. Then they were suddenly forced to abandon the bid after their Japanese banker Nomura pulled the plug.

It is widely believed that Nomura's European team had agreed to finance the offer, but the main credit committee in Tokyo vetoed the deal.

Green, who bought Allders for £162m in February, is now expected to wait until after Christmas before trying to raise the funds again.

Bankers want to see evidence that he can turn Allders around before delving into their pockets for a further acquisition.

News of the talks will reassure long-suffering Fraser investors that Coleman is prepared to do a deal at the right price.

At the start of this year, he came under fire for rebuffing an 85p-per-share offer from Scottish entrepreneur Tom Hunter. Hunter, who owns 6.9% of the group, was refused access to the books. Coleman is clearly happier with the price offered by Green.

Some may wonder why Fraser did not disclose the latest talks to the stock market. Under Takeover Panel rules it does not have to make an announcement unless there is a leak, but investors would have relished the chance for an auction.