Value retailer Instore, which operates the Poundstretcher and Instore fascias, has rejected a 5p-a-share cash bid from Leicester-based wholesaler Crown Crest.

The offer values the retailer at £11.4m and represents a discount of 17.1% on Instore's closing price of 6.03p on 2 July. Instore, which reported a full-year pre-tax loss of £7.4m in April, said the offer significantly undervalued the business.

Crown Crest already holds a 30.6% stake in the business and claimed it had received an irrevocable undertaking for a further 20.4% stake, from Instore's largest shareholder Tradegro, which has a 35.8% stake. This would push Crown Crest's share to 51%.