Beales has said its directors will not accept an offer to buy up to 4.5 million shares in the department store group for 36p a share from investor Andrew Perloff.

Beales said that although the offer, made by John East & Partners on behalf of investment vehicle Wenhedge, is at a premium to Beales’ market share on July 31, it does not reflect the underlying value of the company.

Beales added that Wenhedge had given “no indication” of its future intentions for Beales.

Wenhedge is wholly-owned by property investor Andrew Perloff who, through his pensions fund Maland, holds more than 6 per cent of Beales. If the offer is accepted, he will hold more than 28 per cent of the business.

Beales said that although its share price was 26.5p on July 31, the average closing mid-market price of a share in Beales had been 45.9p over the past 12 months, 35.8p over the past six months and 30.5p over the past three months.

In June, Beales announced that like-for-like sales fell 6.4 per cent in its interim results to May 3 and cited the “depressed retail environment”. Sales fell 14.5 per cent to£27 million and profit before tax was flat, at£881,000.

Bhs retail director Tony Brown joined Beales as chief executive on June 1.