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Hamleys withdraws takeover backing; Bearing up: Toy story set to run and run.

Toy store Hamleys withdrew its backing for a takeover offer from Icelandic retailer Baugur yesterday after a rival suitor raised the stakes with a bid worth pounds 53.1 million.

The independent directors of Hamleys, prized for its flagship store on London's Regent Street, said they would hold further talks with interested parties and advised shareholders to take no action until the discussions had ended.

A takeover battle broke out for the 200-year-old toy store on Friday when Tim Waterstone, founder of book store chain Waterstone's, sought to trump Baugur's offer, which is backed by some of Hamleys' management, with a bid of 230 pence per share in cash.

Baugur's offer stands at 226p. Shares in Hamleys have climbed 83 per cent since the firm said in March its finance director and chief operating officer were exploring a possible management buy-out.

An industry source said he thought Baugur was likely to come back with a higher offer, but it would have to do its sums. A spokesman for Baugur's bid vehicle, Soldier, said the group was still considering its position. Hours before Mr Waterstone tabled its bid last Friday, Baugur -which has acquired stakes in several UK retailers over the past year -had raised its offer to pounds 52.2 million from pounds 47.4 million in anticipation of a rival offer.

Soldier said yesterday that its bid had won acceptances representing just 0.7 per cent of Hamleys' equity. Mr Waterstone, whose bid is backed by private equity fund Rhone Capital, already owns or controls 13.55 per cent of Hamleys.

Baugur needs acceptances from shareholders representing 90 per cent before its offer becomes unconditional, but has the option to waive this condition at any stage. Hamleys has outlets at Heathrow, Covent Garden, and Amsterdam Airport.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Jul 1, 2003
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