Shares of Toys "R" Us Inc., which has been planning to divide its struggling toy business from its burgeoning Babies "R" Us segment, rose more than 2 percent Wednesday as a published report said a bidder has emerged willing to buy the entire company.
The New York Post did not identify the name of the bidder or the amount being offered but reported Wednesday that the offer has disrupted bidding for the toy division of the nation's second biggest toy retailer. It cited unidentified sources for the report.
The stock price has wandered upward since August, when the Wayne-based company announced it wanted to separate the toys and babies units. It has given no substantive guidance since, aside from reiterating that an evaluation on restructuring would be completed by July.
Toys "R" Us spokeswoman Susan McLaughlin said Wednesday that the company would not comment on the Post report.
According to the newspaper and other publications, four groups are finalists in the bidding: buyout specialists Kohlberg Kravis Roberts & Co.; a partnership of Apollo Advisors LP and Permira Advisors Ltd.; an alliance between Bain Capital LLC and Vornado Realty Trust; and a group that includes Cerberus Capital Management LP, Kimco Realty Corp. and Goldman Sachs Group Inc.
At least three have been told that their offers are too low, The Post said.
Representatives for the finalists have either declined to comment or not responded to requests for comment.
Toys "R" Us' toy business has been hurt by price cutting from the big discount chains such as Wal-Mart Stores Inc., the nation's biggest toy seller.
Although Toys "R" Us has 685 toy stores in the United States, and 603 overseas, the 216 Babies "R" Us stores have more profitable.
Babies "R" Us, which sells baby furniture, clothes and accessories, accounted for three-quarters of the company's operating income, despite logging just 15 percent of the company's $11.6 billion in sales, for the fiscal year that ended Jan. 31, 2004.
In that fiscal year, sales at Babies "R" Us stores open at least a year rose 2.8 percent, while sales at domestic Toys "R" Us stores open at least a year fell 3.6 percent.
Results for fiscal 2005 are to be released March 17.