Waterstone quits Hamleys fight

THE battle for control of toy store Hamleys has ended after retail entrepreneur Tim Waterstone pulled out of the running.

Waterstone threw in the towel after he and his backers Rhone Capital decided they could not better a 245p-a-share offer from Icelandic retailer Baugur, which is backing a management team through a vehicle called Soldier.

Hamleys' independent directors have restored their recommendation to the Baugur bid, which values the Regent Street-based company at £58.7m. The Hamleys board had withdrawn its initial support for Soldier's bid after the counter-offer from Waterstone.

Jim Hodkinson, chairman of the committee of independent directors said, the Baugur offer represented a premium of 100% to the company's share price before the announcement of bid talks on 17 March. 'Hamleys last traded at this level in June 1998,' he added.

However, there was concern the bid war had pushed the price up too high. One analyst described the price as 'barmy'. Soldier's first offer was 205p, valuing Hamleys at some £47m. Soldier raised it to 226p before being trumped by a 230p shot from Waterstone, who runs the Daisy & Tom chain of shops selling kids' clothes, books and toys.

After the 245p bid from Soldier, Waterstone would have had to raise his offer to 268p to have a chance of winning.

The shares fell 6p to 252p.