Mattel Ups Bid For Bluebird Toys

US toy company Mattel Inc on Monday trumped rival bidder Guinness Peat Group Plc when it raised its offer for Britain's Bluebird Toys Plc, signalling the end was near in the protracted takeover battle.

Mattel -- maker of Barbie, the worlds most famous doll -- raised its offer for Bluebird to 116.5 pence a share, valuing the maker of Polly Pocket dolls at around 48.5 million pounds.

The US toy giant's final cash offer just pips the raised offer from GPG, the investment company chaired by New Zealander Ron Brierley, of 116 pence made last Thursday.

Under the terms of GPG's final offer it is prohibited from increasing its offer further.

 

"Under the circumstances of Mattel's higher offer, Mattel anticipates that GPG will lapse its revised offer at its earliest opportunity," the US company said in a statement.

Mattel's new offer represents a premium of around 37 per cent to Bluebird's share price the day before GPG's hostile 101 pence hostile bid in January. Mattel trumped that bid in March with an agreed offer at 111 pence a share.

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

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 1.0 pence higher at 115p on Monday lunchtime.

The struggling British company had said when recommending Mattel's original offer that it had taken into account Mattel's decision to exercise its rights, under the terms of its licence agreement, 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 per cent of the group's sales -- were likely to be significant.

In February, Bluebird reported 1997 pre-tax profits of 6.2 million, down from 9.9 million the previous year, as trading conditions in the world toy market remained difficult. Turnover fell to 58.6 million pounds from 67.7 million 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.