STRUGGLING group Allders, which has a department store in the Westgate Centre, Oxford, saw its share price rise after confirming it had received a takeover approach.

Allders has been the subject of takeover speculation since issuing a shock profits warning two months ago after poor summer sales.

The group said: "Discussions are at an early stage. A further announcement will be made when appropriate."

Its shares surged 11 per cent after it said talks with the unnamed third party could lead to a cash offer for the business.

The shares had fallen last month to 42 per cent below their 174p high for the year.

Analysts believe the bidder could be property investment group Minerva, which already holds a 25 per cent stake in the business, but it refused to comment.

Other potential bidders could include House of Fraser or Icelandic retailer Baugur, which recently bought a stake in the Big Food Group.

Allders runs 44 stores in the UK. Its shares fell 12 per cent after the profits warning in September shaved £2m off profit targets.