Baugur unruffled by sex allegations

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The Independent Online

Baugur, the Icelandic retail group, yesterday brushed off damaging allegations made against it by a former business partner and said they would have no bearing on its bid for Hamleys.

The former business partner alleged in a Miami court that Baugur's chief executive Jon Asgeir Johannesson used company funds for the hire of escort girls for a party on a yacht in Florida. Baugur is seperately counter-suing the former business partner, Jon Sullenberger, for unpaid bills.

Baugur is vigorously defending itself against the allegations and yesterday insisted that the US court wrangle would not have any impact on its agreed £59m cash bid for Hamleys, in which it saw off a rival bid from bookselling entrepreneur Tim Waterstone. A spokesman said: "Our bid for Hamleys is going very well ... as of our last announcement, Baugur had 26.3 per cent of the stock already with further irrevocable acceptance of 12.3 per cent."

Simon Burke, Hamleys chairman, was also unruffled by the leak of the court hearing which took place a month ago. He said of the Baugur deal: "It is a cash offer. Shareholders are not being asked to become shareholders in Baugur [which is in the process of being de-listed from the Icelandic stock exchange]."

Mr Burke added: "There has been no internal debate about this. People are just shrugging it off with a wry smile. We should also point out that [under the terms of the Baugur offer] the existing Hamleys management would still be running the business anyway." Meanwhile, Baugur described the allegations as "beneath contempt".

Baugur became mired in controversy a year ago when it was trying to buy parts of the Arcadia retail group which was being taken over by Philip Green. Baugur had been hoping to buy some of the more fashion-oriented chains like Miss Selfridge from Mr Green but was frustrated in its attempts after a police raid on its offices in Iceland.