Debenhams bid battle begins

The Debenhams bidding war begins

Department store group Debenhams has become the centre of the UK's latest retail bid battle.

Debenhams surprised investors earlier this month with news of a takeover approach from the private equity firm Permira Advisers.

The 200 year old chain has now revealed a rival offer from another party and said it is in discussions with both groups.

Permira's offer valued the company at £1.5bn, or 435p a share. The shares opened up 18p at 420p per share on Monday following news of the second bid.

Higher price tag?

Debenhams announced the latest bid following intense speculation that the retail entrepreneur John Lovering has been stalking the group.

Mr Lovering recently tried to take over the Somerfield supermarket chain and is reportedly being backed in his offer for Debenhams by venture capital firms Texas Pacific Group and CVC Capital Partners.

Newspaper reports have also suggested the latest offer will be higher than the 425p per share offered by Permira.

Debenhams gave little away in its statement, saying only the "discussions are at an early stage and there can be no certainty that an offer will be made".

Buying spree

A Debenhams takeover would be the latest in a recent run of deals in the retail world.

The toy shop Hamleys is also embroiled in a two-way battle.

Hamleys revealed on Monday that it had withdrawn its original recommendation for a bid from management together with the Icelandic retailer Baugur, following a higher offer from the Waterstone's founder Tim Waterstone on Friday.

The upmarket store Selfridges is also at the centre of a takeover struggle. It agreed last month to a £598m takeover bid by Canadian billionaire Galen Weston but newspaper reports have suggested a higher offer is in the wings.

Harvey Nichols voted to go private in December, while Allders agreed to a takeover by a consortium led by property firm Minerva.