Hamleys could fall into Chinese hands in the next few weeks.
Groupe Ludendo, the French company that has owned the British toy chain for the past three years, is understood to be finalising a £100m sale after months of talks.
The buyer is believed to be a Hong Kong company run by a relative of Yuan Yafei, billionaire owner of the House of Fraser department store chain. Yuan, chairman of the Sanpower conglomerate, originally planned to do the deal himself and is said to have been closely involved in his relative’s talks.
They had hoped to announce the takeover this week to coincide with Chinese president Xi Jinping’s state visit to Britain, but sources said regulatory hurdles could disrupt the timing.
Yuan, 50, was unknown in Britain until he clinched the £480m purchase of House of Fraser last year from its management team and the remnants of several Icelandic banks.
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William Hamley opened his shop in 1760 in Holborn, central London, under the name Noah’s Ark. It moved to its flagship Regent Street site in 1881. It now has 10 other shops in Britain and 46 international franchises, including a theme park-style emporium in Moscow featuring a full-scale replica of the Millennium Falcon from Star Wars.