South Coast department store group Allders could be taken over by its biggest shareholder, the property group Minerva, if a proposed deal goes ahead.

Minerva's takeover plan values Allders at £124.5m and includes the showpiece Allders At Home store in Southampton's Winchester Road.

Minerva already owns a 25 per cent stake in the company, now based at Croydon since moving headquarters from Bournemouth.

It said terms for a possible offer had been agreed, but admitted discussions were at an early stage and that no assurances could be made that a final offer would be made.

Shares in Allders rose to 153.5p at close of the Stock Exchange on Friday following confirmation of Minerva's interest.

The terms of the deal will see shareholders offered around 160p a share - valuing the company at £124.5m - although the payment of a final dividend will take the figure up to 164.4p.

Minerva added that it intended to make an offer through a newly established company that it would majority own.

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 per cent below their 174p high for the year last month.

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.

As well as being Allders' biggest shareholder, Minerva is working with the retailer on a large redevelopment project in Croydon.