Minority shareholders at French retailer Castorama have won their latest battle with the group's parent company, Kingfisher.

They have secured the appointment of a new bank as arbiter of Kingfisher's takeover bid.

Some Castorama shareholders had argued that conflicts of interest had come to light after Salomon Schroder Smith Barney (SSSB) was appointed as independent judge of Kingfisher's offer.

Lawyers for Castorama and Kingfisher thrashed out an agreement over the weekend.

And on Monday the Paris Commercial Court agreed that Rothschild should replace SSSB.

Objections

Kingfisher is planning to bid 67 euros a share to buy the 45% of Castorama that it does not already own.

The deal would value the outstanding stake at �3.2bn (4.7bn euros), but Castorama's minority shareholders say the price is too low.

Under a 1998 accord between the two, Castorama and Kingfisher agreed to appoint an independent bank to assess the fairness of any takeover bid.

The bank's opinion can overrule objections from minority shareholders.

Shareholder meeting

Castorama lawyer Philippe Ginestie said that the decision to appoint a new bank was "a considerable victory".

Rothschild has a month to work on evaluating Kingfisher's offer.

Kingfisher holds its annual shareholder meeting on Friday, when management will seek backing for its Castorama bid.

Castorama's minority shareholders are also reported to be considering sacking their banking adviser, Merrill Lynch, for failing to tell them that SSSB was financial adviser to the Compass Group, which is chaired by the Kingfisher's chairman.

Castorama chief executive Jean-Hugues Loyez told the Observer newspaper: "I am contemplating the future of the relationship with Merrill Lynch".