Hunter may upset Green's agreed £158m Allders bid

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The retail entrepreneur Terry Green found his £158m bid for Allders thrown into doubt yesterday when Scottish businessman Tom Hunter increased his stake in the department store group to 2.78 per cent and said he would buy more shares today.

Mr Green unveiled an agreed bid for Allders of 160p a share first thing yesterday morning, backed by Minerva, the property company that has 26 per cent of the shares.

But by the close of trading, Mr Hunter, who is also stalking House of Fraser, had acquired a further one million Allders shares at 167p each, a premium to Mr Green's offer. Allders shares closed 3p higher at 166.5p, indicating a possible bid battle. "This is not a done deal," one source close to the bid said.

Mr Hunter, who is skiing in Val d'Isere, said: "I'm going to continue to build my stake in Allders. I don't believe they (House of Fraser and Allders) can go forward as single entities." Mr Hunter is known to believe the two should merge, but when asked if he would launch a rival bid for Allders, he declined to comment.

When informed of Mr Hunter's share buying, Mr Green said mysteriously: "Rock 'n' roll. Marvellous." Asked how the bid battle might progress he said: "I've no idea how it might turn out."

Mr Hunter has made an indicative offer of 85p a share for rival department store group House of Fraser, valuing the company at £197m. This has been rejected but Mr Hunter has said he will return to the negotiating table after Christmas.

It is thought Mr Hunter might be buying his stake in Allders in order to block the joint Minerva-Terry Green bid. It is possible he is seeking an arrangement where Minerva could keep Allders' key Croydon flagship site, which it is looking to re-develop. Mr Hunter may then be able to merge the two operating companies. However, Takeover Panel rules stipulate that all shareholders must be treated equally and prohibit special deals with individual shareholders.

Under the terms of Minerva's joint bid with Terry Green, the bidding company is offering £131.9m for Allders's share capital. It would also take on £26.4m of debt and pay Allders' final dividend of 4.4p a share.

Mr Green would be chief executive and pay £125,000 for a 10 per cent stake in the company. Phil Cox, a former Asda finance director, would take on the finance role and also have a 10 per cent stake. Mr Green would be paid a salary of £500,000 with Mr Cox earning £400,000.

Mr Green has been looking for a deal after leaving Bhs in the spring. Mr Hunter made his fortune selling his Sports Division sports chain to JJB Sports for nearly £300m.