The board of Arnotts has received an indicative offer worth €14.2625 per share from a consortium led by non-executive director Mr Richard Nesbitt.

Nesbitt Acquisitions, which also includes Arnotts chairman Mr Michael O'Connor, already controls nearly 19 per cent of the company's shares.

The indicative offer, which values the company at nearly €254 million, comprises a cash offer of €14 per share in addition to the proposed final dividend of 26.25 cent per share.

However, it is subject to the finalisation of legal documentation and certain confirmatory due diligence.

Arnotts's committee of independent directors, set up to consider any offers made for the company, said the offer was "at a level that the independent committee would be prepared to recommend".

A further announcement on the offer is expected to be made in the week ending May 16th.

The Arnotts board received two offers for the Dublin retailer by its deadline earlier this week.

It is understood that Carrgran, the Lehman Brothers-backed bid vehicle that has made a number of offers for the company since last year, submitted a higher bid than its last offer of €12.75 per share but it was topped by the Nesbitt bid.

A Carrgran spokesman said last night that it had noted yesterday's statement and awaited developments.

Nesbitt Acquisitions, which is being advised by NCB Corporate Finance, is receiving financial backing from Anglo Irish Bank and has its funding fully in place, according to a spokeswoman.

The bid vehicle already controls nearly a fifth of the company through Art plc, which represents members of the Nesbitt family and holds 9.9 per cent of the shares. Other Nesbitt family members, including Mr Richard Nesbitt, hold a further 5.5 per cent, while the family of Mr O'Connor owns 3.4 per cent.

The Nesbitt offer is a sizable increase on the last Carrgran bid of €12.75, which was rejected by the board as failing to value the business and its prospects adequately.

It also represents a 12 per cent premium on the company's net asset value of €12.71 per share.

Arnotts shares closed 25 cents higher at €12.75 last night. But dealers said the share price did not reflect the improved offer as volume in the stock was light and it failed to trade after the announcement was made.

The Nesbitt family has long-standing ties to Arnotts and Mr Nesbitt has served on the board for more than 20 years. Mr O'Connor has been a board member since 1968 and was appointed chairman in 2000.

Other shareholders in Arnotts, who will play a key role in deciding the outcome of any bid for the company, include the staff pension fund with nearly 13 per cent of the shares, Fidelity with 10 per cent and Bank of Ireland Asset Management with 9.8 per cent.