Clothing retail giant Arcadia on Friday said it has accepted billionaire entrepreneur Philip Green’s £770 million bid for the business.

The company, whose chains includes Top Shop, Top Man and Miss Selfridge, said the offer "represents a value which the board will recommend to shareholders".

Green will pay 408p a share for the company after his earlier bid of 365p a share was rejected. Shareholders will also collect a second dividend of 4p a share.

When employees' options payments are also included, Green will end up paying £857m for the company which will make the Bhs chief one of the country’s biggest players in the women’s clothing sector with a market share of 12.6 per cent.

On Thursday, Green’s acquisition vehicle, Taveta Investments Ltd, said its offer had the full backing of majority shareholder Baugur.

It added it would hold talks with the Icelandic retailer over the banners it wants to buy but will sell them through a competitive process.

Acradia chief executive Stuart Rose said he expects the takeover to be completed before the end of the year and has agreed to stay on through the transition period.

Rose, who will make around £25m from the deal, added that Green had not approached him to stay on indefinitely.