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Last Updated: Tuesday, 28 June, 2005, 07:03 GMT 08:03 UK
House of Fraser to buy Beatties
House of Fraser store
The deal will boost earnings, House of Fraser says
Department store chain House of Fraser has announced it has agreed to buy the Beatties group of department stores.

Wolverhampton-based Beatties, which began life as a drapers' store, has 12 outlets across England.

Under the terms of the deal, Beatties shareholders will receive 168p a share, which values the business at about 69.4m ($126.3m).

House of Fraser said the deal would improve its national coverage and increase earnings.

The 168p-a-share offer represents a premium of 14.7% to Monday's closing price and 44.8% higher than before the firms said they were in talks.

Tough trading

House of Fraser had a tough start to the year, reporting earlier this month that like-for-like sales fell 3.2% in the first 19 weeks of its year.

The only place where the two firm's stores overlap is Birmingham.

House of Fraser believes some of Beatties properties are worth "significantly in excess" of the value shown in their accounts.

The chain will make a 4m contribution into the Beatties pension fund, with up to a further 9m payable over the following two years

Beatties shareholders holding a total of 10.6% of the firm's shares have voted in favour of the offer.

Beatties in rival takeover talks
20 Jun 05 |  West Midlands
Sales suffer at House of Fraser
16 Jun 05 |  Business
Tough market hits House of Fraser
04 Jan 05 |  Business
Sales boost for House of Fraser
29 Sep 04 |  Business
House of Fraser holdings sold off
13 Sep 04 |  Business

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