Baugur drops interest in Moss Bros

Icelandic investment group Baugur today dropped its bid for struggling men's fashion chain Moss Bros.

Hamleys owner Baugur, which had made a preliminary 42p-a-share offer worth £40.2 million, blamed the move on changes to the retailer's share register.

Baugur first signalled interest in Moss Bros last year, but speculation was been rife before today that it may walk away. Moss Bros recently reported a £1.4 million annual loss.

It is thought the Moss and Gee founding families behind the chain - who own an estimated 25% - were opposed to the Baugur takeover. In addition, fashion chain Laura Ashley has increased its stake in the firm to almost 10%.

Baugur said the recent changes to the share register meant the execution risk associated with completing the proposed offer had become unacceptable.

Gunnar Sigurdsson, chief executive of Baugur Group, said: "We are disappointed by recent developments that have effectively frustrated our proposed offer, but remain supportive of the management team.

"Baugur is keen to continue to work with the board, management and other major shareholders to identify ways to unlock the potential in the business."