Baugur to announce Moss Bross takeover

Baugur will announce this week that it plans to proceed with the proposed £40.2m takeover of struggling menswear chain Moss Bros.

The Icelandic investor is expected to tell the City on Tuesday it has completed due diligence work and is putting the finishing touches to its financing. Moss Bros opened the books to Baugur in March after it tabled an indicative 42p-a-share offer. But its delay in making a firm offer led to speculation it would walk away.

Moss Bros would join a retail empire that includes House of Fraser and Hamleys. However, not all its investments have worked out. This week it is understood to have sold value fashion chain MK One to restructuring specialist Hilco for just £1. Baugur bought MK One for £55m in 2004 but it has struggled to compete with rivals such as Primark.