Toys R Us okays US$6.6bil buyout


  • Business
  • Saturday, 19 Mar 2005

NEW YORK: Toys R Us Inc, the No. 2 US toy retailer whose fortunes have sagged on stiff competition from discounters like Wal-Mart Stores Inc, has agreed to be acquired by two private equity firms and a real estate group in a deal valued at US$6.6bil. 

The team of Kohlberg Kravis Roberts & Co (KKR), Bain Capital and Vornado Realty Trust, which will own equal stakes in Toys R Us, beat out Cerberus Capital Management to win the auction for the entire company. 

Until this week, it had been thought that Toys R Us would sell off only its toy business and focus on its fast-growing Babies R Us, which sells bedding, furniture, clothes and other baby gear, as well as toys. Instead, the entire company will become privately owned under the deal. 

Before the buyout was officially announced late on Thursday, sources had said the group would pay US$26.75 a share, pegging the value of the deal at about US$5.75bil. 

But Toys R Us and Vornado said the price tag was US$6.6bil. The retailer said the price included options, warrants, restricted shares and equity security units. The buyers also would assume Toys R Us’ debt. – Reuters  

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