Hamleys agrees £47.4m takeover bid from Baugur

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The Independent Online

Hamleys, the 243-year-old toy retailer in London's Regent Street, yesterday agreed a £47.4m takeover deal from its management and the Baugur Group - Iceland's largest retailer - as it asked shareholders to accept a price of 205p per share for the company.

The management team is led by Hamleys' chief operating officer, John Watkinson.

The offer is a 62 per cent premium to Hamleys' closing price on 14 March - the date it revealed it was in bid talks with Mr Watkinson and its finance director, Ian Parker. Shares in Hamleys yesterday closed up 4 per cent at 202p.

The £47.4m deal was higher than many in the City had expected for the retailer, whose sales have been hit by a fall-off in tourism.

"We had plenty of interest and this was the best offer we received. There is nothing like competition to push the price up and nobody else came to us with a higher deal," Simon Burke, executive chairman of the company but not part of the bidding team, yesterday said.

But despite the high price, there was still speculation yesterday that another bidder may yet come forward to trump the Baugur offer. Tim Waterstone, the entrepreneur behind the book chain and the children's retailer Daisy & Tom, is thought to have been interested in the toy store.

Mr Burke assured investors that he and the board would look at another offer should one come forward which beat the Baugur deal.

The Baugur bidding group, named Soldier, yesterday said it already had indicative acceptances from 40.9 per cent of Hamleys' shareholders.

Mr Burke will get a £1.2m golden goodbye if shareholders agree to the takeover. He plans to return to the retail sector, and is setting his sights on running a larger company next time. "I don't have any plans as yet," he said. "But I hope before too long I'll come back to the retailing sphere and my ambition would be for a larger business. I'm not planning to sink without trace." Mr Watkinson will lead the company after the takeover.

This is Baugur's first acquisition in the UK, although it has had significant shareholdings in House of Fraser, Big Food Group and Selfridges. "The acquisition of Hamleys is an important step in Baugur's international strategy. We regard Hamleys .... as a significant opportunity to strengthen our UK retail interests," Jon Asgeir Johannesson, chief executive of Baugur, said yesterday.

Hamleys also reported yesterday that its pre-tax profits were up 45 per cent to £5.4m.