The owner of the BHS store group, Philip Green, has launched a second takeover bid for UK fashion retailer Arcadia, the owner of Top Shop, Burton and Miss Selfridge among others.

Arcadia brands

Dorothy Perkins Burton Evans Wallis Top Shop Top Man Miss Selfridge

Now offering up to 408 pence per share, Mr Green decided to press ahead even though his first bid was rejected by the board of Arcadia. The new offer values Arcadia at �770m ($1.2bn).

The deal would create the biggest fashion retail group in the UK, with up to 40,000 employees, a string of top High Street names in its portfolio, and about a 30% share of the UK clothing market.

Arcadia's shares soared in reaction to the news, gaining nearly 50p to trade at 392p. The firm's board said it was "considering its response".

If Arcadia's directors accept the deal, they stand to earn a cash windfall of about �30m through the shares they hold in the company. Arcadia chief executive Stuart Rose alone would be set to net �20m.

Mr Green's offer is subject to a number of conditions though, chiefly that Arcadia's board finally recommends the deal to shareholders, and "the finalisation of financing arrangements".

Soaring shares

Mr Green's bid is backed by the Icelandic retailer Baugur, which is a 20% shareholder in Arcadia. The new offer is dependent on Baugur selling most of its Arcadia stake to Mr Green, while in return buying some of the group's assets for itself.

Baugur is said to be interested in the British firm's young fashion brands - Top Man, Top Shop and Miss Selfridge.

Arcadia shares have soared in recent days, to 343.5p on Wednesday evening. Mr Green's first offer 10 days ago was for 365p a share, at a time when Arcadia stock traded at about 300 pence.

But Arcadia's board rejected the approach, saying the offer was too low.

Back then Arcadia's chief executive Stuart Rose told BBC Radio 4's Today programme: "We don't think it offers value for the business".

"Philip Green has never knowingly overpaid for a business," he added.

But Mr Green hit back at the suggestion that his bid fell short of the mark.

Empire building

Philip Green's success at reviving BHS has earned him the respect of the fashion retail industry and he is keen to expand his empire.

He was involved in merger talks with Woolworths in June this year, and takeover talks with Marks and Spencer in March last year, but both ended without a deal.

He is thought to be considering making an offer for Littlewoods' stores.

His 165 BHS shops now have sales of about �1bn.

Buying Arcadia would give him about 900 High Street stores, and the chance to take control of the UK's middle-market fashion sector.