Baroness ready to sweep into Debenhams hotseat.

Byline: By Phil Waller

A consortium led by private equity group CVC Capital Partners was on track to win the hand of Debenhams yesterday, after its opponent pulled out of a takeover battle for the store group.

Rival bidder Laragrove said it would not be raising its pounds 1.5bn offer for Debenhams after CVC's Baroness Retail vehicle yesterday upped its bid to pounds 1.72bn.

Laragrove, led by investment group Permira, said the 470p-a-share offer proposed by Baroness exceeded the price it was prepared to pay.

"Laragrove believes Debenhams has a superb management team and wishes them well in their future," Laragrove said in a statement.

Baroness will now attempt to gain the approval of Debenhams' shareholders for its improved offer, which has the agreement of the store group's independent directors.

Laragrove's decision to pull out of the running for Debenhams comes days before an October 31 deadline set by the Takeover Panel.

Baroness, which also includes Texas Pacific Group and investment bank Merrill Lynch, was effectively bidding against itself with yesterday's new offer, which tops the pounds 1.66bn bid it made last month.

It represented a 3.3pc premium to its original 455p-a-share proposal and a 10.6pc improvement on the pounds 1.5bn offered in July by Laragrove.

The takeover saga has been running since May, when Debenhams revealed it had received a takeover approach from Permira.

After intense discussion, the store group finally recommended Permira's offer to shareholders in July in the absence of a higher bid.

It freed Debenhams' management team, led by chief executive Belinda Earl, to work with Laragrove. The future of Ms Earl and the store's other senior managers is unclear.

A Baroness spokeswoman said the consortium had spoken to Ms Earl. The spokeswoman said: "We have the highest respect for her and whether she stays depends on whether we can reach an agreement with her."

Debenhams revealed profits in line with City forecasts earlier this month.

The group reported a 9.6pc rise in underlying profits to pounds 168.4m after what it described as a "volatile" year for retailers in which trading conditions had changed from month to month.

Total sales grew 6.7pc to pounds 1.81bn in the 12 months to August 30 - up 3.7pc on a like-for- like basis.

In the full-year results statement, chairman Peter Jarvis praised the management for delivering a strong trading result while co-operating with the two rival bidders as they formulated offers for the chain.