Arnotts chairman Nigel Blow has told The Irish Times he was "disappointed and surprised" that Ulster Bank sold its €140 million loans in the department store retailer to Fitzwilliam Finance Partners Ltd, an investment company led by solicitor Noel Smyth, rather than accepting a bid that the management team had submitted with backing from Meyer Bergman, a London-based retail investment group.

“It was very disappointing what happened with Ulster Bank,” Mr Blow said. “In fact, disappointed is an understatement.”

Mr Blow was brought in to run Arnotts by Boston-based Palladin Capital when it was appointed by the retailer's lenders – Irish Bank Resolution Corporation and Ulster Bank – in 2010 to run the Henry Street store and its subsidiary operations.

Arnotts’ debt pile is a legacy of the folly of the Northern Quarter development pursued by former owner Richard Nesbitt. Palladin’s contract expired earlier this year while Mr Blow relinquished his chief executive role to return to Britain for family reasons. He took up the role of chairman and set about secu- ring a long-term investor for Arnotts to acquire its loans.

IBRC loans
Arnotts management and Meyer Bergman have also bid for the loans held by Irish Bank Resolution Corporation, which are being sold by the former bank's special liquidators. The deadline for final bids was last Friday and an announcement on the outcome is expected from the liquidators shortly.

When asked if he expected his group to succeed with its offer in light of the outcome on the Ulster Bank loans, Mr Blow said: “Who knows? It’s never over until it’s over. It’s a very interesting asset and I can’t imagine it’s just a two-horse race.”

UK retailer Selfridges, owned by Canadian billionaire Galen Weston, is providing the financial backing to Fitzwilliam and Mr Smyth.

Mr Weston also owns Brown Thomas and his family are major shareholders in Penneys parent company Associated British Foods.