Selfridges 'body craze' month is proving a hit

Upmarket store group Selfridges has agreed to a �598m takeover bid by Canadian billionaire Galen Weston.

Selfridges has been at the centre of bid speculation in recent weeks, with at least three other parties thought to be interested in taking it over.

Mr Weston, whose family owns luxury food retailer Fortnum and Mason, emerged as the favourite to land the company over the weekend.

His cash offer, worth 387p a share, trumped a bid from Scottish retail entrepreneur Tom Hunter.

'Great offer'

Mr Hunter, who in recent months has launched unsuccessful bids for the Allders and House of Fraser store groups, has now pulled out of the race.

A spokesman for Mr Hunter said he had joined forces over the weekend with the billionaire Reuben brothers to make a fully funded cash offer of 385p per share, plus a dividend of 5.25p.

But the Selfridges board decided to recommend Mr Weston's bid to shareholders instead.

"The Weston offer has clear synergies over and above ours.

"They have made a great offer for a fantastic business and we wish them every success," a spokesman for Tom Hunter told the BBC.

Counter bids?

Selfridges chairman Alun Cathcart said Mr Weston's offer was "fair and reasonable" and represented a 60% premium to Selfridges' stock market value five weeks ago.

The offer will also assume Selfridges' net debt, estimated to be around �30.1m.

However, some Selfridges shareholders may hold out for �4 a share, leaving the door open for a possible counter bid.

Transformed

Selfridges chief executive Peter Williams was reportedly planning to lead a management buy-out while a consortium led by Goldman Sachs is also considering making an offer.

Analysts have said the main attraction for bidders is Selfridges' flagship store on London's Oxford Street, famed for its designer collections.

Despite recent disruption from the closure of the Central Line tube service, the store has an estimated value of �350m.

Selfridges also has two stores in Manchester and plans for a regional roll-out in other cities including Birmingham, Glasgow, Leeds, Bristol and Newcastle.

The group was transformed under former chief executive Vittorio Radice and now stocks designer labels such as Paul Smith and Burberry alongside its more traditional menswear and womenswear and electrical products.

Selfridges shares were up 36p at 391.5p in early trade.