Whittard says trading will remain tough in the short term

The bid from Baugur, which owns fashion chains Oasis and Coast and jeweller Goldsmiths, values Whittard at �21.5m.

Whittard shares have been suffering as its sales have declined, and takeover speculation has swirled around the company since the summer.

Baugur plans to merge Whittard with health store operator Julian Graves and delist the firm from the stock market.

The offer of 90 pence per Whittard share represents a premium of about 21% to the closing price of 74.5 pence on 5 December, which was the day before Whittard announced it had received a bid approach.

'Strong brand'

Richard Rose, chairman of Whittard, said that the offer comes at a time when "market sentiment towards smaller retail companies is increasingly negative and when the current retail trading environment shows no indication of short term recovery".

Baugur will buy Whittard via its majority-owned Barney Holdings business.

Julian Graves founder Nick Shutts also is a shareholder in Barney.

"Whittard is a very strong brand, but we believe that its full potential can only be achieved as a private company," said Mr Shutts, who also is managing director of Julian Graves.