Baugur on brinkof £150m Oasis deal

ICELANDIC stores group Baugur is this weekend expected to finalise a £150m takeover of the Oasis fashion chain.

The deal marks a dramatic turnaround for Oasis, which was taken private in 2001 for just £55m after a series of profit warnings.

The management team, including chief executive Derek Lovelock and finance chief Richard Glanville, will receive £30m from Baugur for their stakes in Oasis. But it is understood they plan to reinvest about £15m in the business.

For Baugur, the deal represents a key expansion of its burgeoning UK retail business. The family-owned Icelandic company, headed by Jon Asgeir Johannesson, snapped up Britain's most famous toy shop, Hamleys, this year. It also holds stakes in House of Fraser, Big Food Group and Somerfield.

Lovelock and Glanville, who in two years have overseen a profit rise from £8.6m to £15.6m , will remain on the Oasis board and will be joined by Baugur representatives.

They plan to expand Oasis in Britain and overseas. It runs 218 stores under the Oasis brand and 124 shops under the fast-growing Coast brand.

Expansion could include buying other fashion chains. A source close to the management said: 'They see this as having the potential to be the next Arcadia.'

Baugur once harboured ambitions to buy Arcadia, the Top Shop to Dorothy Perkins chain. It backed retail tycoon Philip Green's bid for the company, but pulled out when a financial scandal broke alleging that Baugur bosses used company funds to buy a yacht in Miami.

Baugur settled a civil case out of court but Icelandic authorities are still investigating.