The pounds 10-a-share offer by Mattel, which owns the Barbie brand, exceeds by pounds 5.1m last week's 900p bid by Hasbro, Sindy's owner.
The Mattel bid was submitted to the Stock Exchange at 11.45 on Thursday night, 15 minutes before the expiry of the deadline for finding a counter-bidder.
After that, Hasbro would, in effect, have clinched the deal by securing irrevocable acceptances from Spear family trusts, which own 24.9 per cent of the business.
Added to Hasbro's 26.7 per cent stake, which was acquired four years ago, that would have given Hasbro more than half the shares.
Hasbro was yesterday in discussions with its advisers and has not yet reacted to Mattel's bid. Its offer had been recommended by Francis Spear, chairman and a descendant of the company's founder, but had been vehemently opposed by the rest of the board, who believed it undervalued the business.
Yesterday, the board - including Mr Spear - said it welcomed the Mattel offer. Mr Spear said he was still considering his response, but the rest of the board believes the offer from Mattel 'represents a better prospect for the future development of the business of Spear' and recommended it in preference to Hasbro's.
Mattel is the world's second- largest toy manufacturer, owning Fisher-Price and the Disney toy brand as well as Barbie.
The acquisition of JW Spear would give it rights to the Scrabble board game everywhere apart from the US - where they are owned by Hasbro - as well as children's games like Atmosfear, Rummikib and Doh-Nutters.
These would give it a 16 per cent share of the games market in Britain, compared with 40 per cent for Hasbro and 15 per cent for Waddington, owner of Monopoly.
The pounds 10 offered by Mattel compares with 740p when JW Spear's shares were last traded on 12 May. They are, however, tightly held. Mr Spear and his family control 40 per cent.
View from City Road, page 14
(Photograph omitted)Reuse content