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Wednesday, 4 August, 1999, 11:25 GMT 12:25 UK
Mattel wins contest for Bluebird
The new offer values Bluebird at 116p a share
The new offer values Bluebird at 116p a share
The tug of war for control of Bluebird Toys looks like it has been won by US toy group Mattel, as Polly Pockets fall under Barbie's spell.

The American company has raised its offer for Bluebird to about 48.5m ($79m), improving on Guiness Peat Group's (GPG) final 116p a share offer last Thursday.

Mattel's new and final offer, recommended by the Bluebird board, values each Bluebird share at 116.5p, marginally higher than GPG's 48m offer.

GPG's offer was declared final on Thursday and under the rules of the takeover code, GPG chaired by New Zealander Ron Brierley, cannot raise its offer.

A spokesman for Mattel said: "Under the circumstances of Mattel's higher offer, Mattel anticipates that GPG will lapse its revised offer at its earliest opportunity."

Struggle for control

Mattel - maker of Barbie, the world's most famous doll - values Bluebird - the maker of Polly Pocket dolls and Etch a Sketch - at around 48.5m ($78.5m).

Its new offer represents a premium of around 37% to Bluebird's share price the day before GPG's hostile 101p hostile bid in January.

Mattel trumped that bid in March with an agreed offer at 111p a share.

As of last Friday, Mattel had acceptances representing 26.9% of Bluebird's share capital. GPG holds some 23%.

There had been market speculation that GPG had only entered the fray to provoke one of the US toy makers into bidding for Bluebird, and so ensure GPG a profit on its shareholding.

Bluebird's share price stood 1.0p higher at 115p on Monday lunchtime.

Long term strategy

The struggling British company said that when recommending Mattel's original offer that it had taken into account Mattel's decision to exercise its rights to make Bluebird's Polly Pocket for North America and restrict Bluebird's margins where Mattel distributes the toy.

It had said the resulting reduction in profits accruing to Bluebird from Polly Pocket - which accounts for 50% of the group's sales - were likely to be significant.

In February, Bluebird reported 1997 pre-tax profits of 6.2m, down from 9.9m the previous year, as trading conditions in the world toy market remained difficult.

Turnover fell to 58.6m from 67.7m in 1996, mainly due to the fall in sales of Polly Pocket and Disney branded toys in North America.

Bluebird plans to relaunch the Polly Pocket and Disney Tiny Collection in North America next year, and Mattel's co-operation has been viewed as key to the success of the relaunch.

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