Rival bid for Debenhams

Department store group Debenhams has recommended a £1.66bn ($2.65bn) takeover offer for the firm after withdrawing its support for an earlier bid.

The offer from Baroness Retail - a consortium including US private equity groups CVC Capital and Texas Pacific - is worth 455p a share.

The bid trumps a 425p per share offer from private equity group Permira, which was made in July.

Permira said it was considering its position following the new bid.

Bid battle

Shares in Debenhams closed up 23.5p, or 5%, at 458.5p on Friday afternoon as investors hoped Permira would increase its bid.

"I still think 465 pence per share is a possibility should Permira choose to make a higher offer," said Isabelle Payet, analyst at brokerage ETrade Securities.

The firm's share price has risen by more than 30% since April this year as the battle for the business has developed.

Debenhams is one of a number of famous High Street names - including Selfridges and House of Fraser - to have attracted interest from private buyers.

The retailers are proving popular as they are seen as reliable cash generating businesses that also have valuable property assets.

Debenhams, which was demerged from the Burton Group in 1998, has 102 stores in the UK and the Republic of Ireland, and 10 international franchise stores in Europe and the Middle East.