BOURNEMOUTH-based department store chain Beales is set to be taken over in a deal which values the historic business at just £1.2million.

The company’s board has agreed the offer despite describing it as ‘disappointing’ and saying it could have achieved a better price under other circumstances.

The bid comes from English Rose, a company owned by property entrepreneur and UKIP donor Andrew Perloff, and would return Beale PLC to private hands.

Mr Perloff and his family already control almost 30 per cent of Beales shares and his company Panther is landlord to 10 of its 29 stores.

Beales chairman William Tuffy said: “English Rose’s proposal offers the certainty of a cash exit for shareholders today and improves the medium term financial security of the Beales business. Despite the significant progress made by the current management team in first stabilising and then greatly improving operating performance, the business continues to face significant challenges and financial constraints.”

He said the board had “explored all other realistic alternatives” to raise more capital but any of them could be vetoed by Mr Perloff’s shareholding.

“As a result, Beales may be unable to generate sufficient cash flows to meet its financial commitments in the future,” he said.

English Rose is offering 6p a share – around 48 per cent less than last Friday’s closing price of 11.5p.

Dr Jeff Bray, Waitrose fellow of retailing at Bournemouth University, said: “This is bad news but it could be a lot worse.

“It’s clear that something drastic needed to happen to Beales and sale as a going concern is better than the possible alternatives.”

He said the business had been hit by the spending downturn since 2008, the growth of online shopping and the success of able competitors such as John Lewis.

He predicted a new owner would not have the same “emotional attachment” to the business, founded in Bournemouth in 1881. He said the board would have recommended the deal with a “heavy heart”.

“I don’t think they would be recommending it unless they were very clear there was the imminent possibility of something worse being forced upon them,” he added.

Ian Girling, chief executive of Dorset Chamber of Commerce and Industry, said: “The economy is in recovery but there’s still some way to go as the internet continues to draw people.

“Retail and the high street are changing. We’re not out of the woods yet.”

Bournemouth Borough Council’s chief executive, Tony Williams, said: “Beales is a key part of what our town centre has to offer and we would like to see it in safe hands.

“We would ideally like to meet any potential investor to discuss what their future plans would be for one of our primary retailers.”