Baugur in frame as Thorntons chairman fails with bid

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Thorntons announced yesterday that £87m bid talks with its chairman had fallen apart, but it is understood the acquisitive Icelandic group Baugur may make a move for the chocolate retailer.

Baugur, which has bought a string of high street names, is believed to have considered an offer for Thorntons in the past. It thinks Thorntons would fit well with two of its other UK acquisitions - the coffee and tea retailer Whittard of Chelsea and the health store operator Julian Graves.

Baugur declined to comment. One industry source said: "They [Baugur] are keeping an eye on it. But there's nothing imminent."

Separately, Thorntons, which issued a profits warning last month, said takeover talks with a group led by the chairman, Christopher Burnett, had ended after he cut his offer to 130p a share from an initial proposal of 185p in August. Thorntons said 130p "undervalued" the company.

After the collapse in talks, Mr Burnett agreed to step down as chairman "in the best interests of the company". John Jackson, a senior independent director, is acting chairman until a permanent replacement is found. He said there had been no official takeover approach from Baugur.

Thorntons has been hit by the squeeze in consumer spending which has led to less enthusiasm for its luxury products.