Polly puts the value on

CITY TALK

WHAT a tangled web we can weave. The circumstances surrounding Bluebird Toys, the maker of Polly Pocket, become more convoluted by the minute. Last week, GPG, the vehicle of Sir Ron Brierly, trumped Mattel's offer of 111p with a revised and final offer of 116p.

Yet the past few weeks have seen a desperate attempt by GPG to try and get hold of the original licencing agreement between Mattel and Polly Pocket struck in 1989. This allows Mattel to restrict margins where Polly Pocket is sold in countries outside the US through a different distributor.

The upshot is that Mattel effectively has a call option on Bluebird Toys. It has stated it will exercise the option if it acquires the business, and effectively take control of Polly's fortunes. If its bid wins more than 50 per cent of votes, it will also delist the shares. If it does that, GPG's 23 per cent would become worth a lot less. And any other shareholders would be a minority in an American-listed company.

GPG, however, has a different trump up its sleeve. It will only declare its offer unconditional if 92.3 per cent of shareholders vote in favour. The explanation from the GPG camp is that they want the deal to reach a conclusion. It has, after all, been dragging on for over five months, in a bid which values Bluebird Toys at pounds 48.2m - hardly megabucks.

If that is so, shareholders have a delicate choice to make. If they back GPG, and it transpires that is the losing horse, the value of their investment plummets. Alternatively, if they accept Mattel's lower offer, they may miss out on the extra 5p. Tricky.

But hope may be at hand. For Mattel to raise its offer once again - to 117p, say - will cost it just a few million, peanuts for a US business with deep pockets.

Over the weekend, Mattel directors have been considering exactly these concerns. Doubtless Bluebird's directors would prefer this result. For the moment, best hang on to the shares.

Next week sees figures from Versailles, a little-known concern focused on trade finance. Expect figures to come in 30 per cent ahead of last year, with pre-tax profit at pounds 7.3m: not bad for a business that employs 40 people.

Oasis Healthcare, the dentistry concern, now stands out as the only one of its kind after rival Whitecross was snapped up by an American. The Ofex-traded business could have serious potential, as it is concentrating on buying existing dental practices. The benefits of economies of scale, one finance function and more coherent marketing should become apparent. It has also landed Paul Gaunt as a non-executive director. With his background in fund management, he can encourage further institutional backing.

RICHARD PHILLIPS