Toys R Us sends shareholders ballots for buyout offer

NEWARK, New Jersey (AP) - Shareholders of Toys R Us Inc. were told Monday that if they do not approve the buyout of the company by a private consortium, the No. 2 U.S. toy seller must pay up to $30 million (euro23.9 million) to reimburse the group for expenses. 

In ballots mailed Monday, stockholders also were told that if the board of Wayne-based Toys R Us gets a better offer than the consortium's bid, the company must pay the group a $247.5 million (euro197 million) termination fee. 

The toy-seller's board has accepted a $6.6 billion (euro5.26 billion) buyout offer from two equity firms, Bain Capital Partners and Kohlberg Kravis Roberts & Co., and a real estate developer, Vornado Realty Trust. 

If the offer is approved at a June 23 special meeting, stockholders would get $26.75 a share, the same price anticipated when the buyout was announced March 17. 

The company, second only to Wal-Mart Stores Inc. in domestic toy sales, noted that the per share price was a "substantial premium to historic trading prices.'' 

The offer is 123 percent over the closing price of $12.02 on the New York Stock Exchange on Jan. 7, 2004, the trading day before the company announced it was exploring plans that included dividing the toy segment from the smaller but more lucrative Babies R Us business.  

The consortium's offer covers both the toy and baby segments. 

The price is 63 percent over the closing sale price of $16.42 on Aug. 10, 2004, the day before the company announced it was exploring a sale of the global toys business. 

Shares of Toys R Us rose 2 cents to $26.11 in morning trading on the New York Stock Exchange, at the high end of a 52-week range of $12.90 to $26.35. 

In the ballots, which were filed with the Securities and Exchange Commission, the board advised people who held shares as of Friday to vote to take the company private. 

A majority of shares is required for the sale to be approved. Shareholders can vote by phone, Internet, mail or in person at the meeting in New York. 

As of Friday, company directors and executives owned about 0.39 percent of the shares and all plan to vote all of their shares in favor of the buyout, the company said. - AP 

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