DEPARTMENT store chain Allders is set to be taken over in a deal with retail veteran Terry Green worth more than £158m.

The group, now based at Croydon but formerly with headquarters at Bournemouth, has agreed a cash offer from Scarlett Retail, which is owned by property group Minerva, City firm Lehman Brothers and a management team comprising Mr Green and Phil Cox.

Scarlett is offering £131.9m - or 160p per share - and will also take on net debt of £26.4m, making the deal worth a total of £158.3m. Allders chairman Brian Fidler said the group was making good progress but conceded that weak stock market conditions and the possibility of a downturn in consumer demand were still threats.

"Despite our confidence that our strategy will deliver long-term value for shareholders and the interest being expressed in the company by other parties, these factors have led to an unanimous intention to recommend shareholders to accept the offer,'' he said. Scarlett is owned 60 per cent by Minerva and 20 per cent by Lehman Brothers, with Mr Green and Mr Cox holding ten per cent each.

Mr Green stepped down as chief executive of retail group Bhs earlier this year, saying he wanted to focus on new challenges within the retail arena. Mr Cox is a former finance director of supermarket group Asda and is currently non-executive chairman of pubs group Punch Taverns.

Allders runs 24 department stores and 20 stand-alone homeware shops. Its Allders at Home in Winchester Road, Southampton, and long established Portsmouth department store play a major part in the company.