Investcorp Buying Saks for $1.5 Billion : Retail: Luxury stores’ British owners accept bid by international investment group.

The prestigious Saks Fifth Avenue department stores will be sold to an international investment group for about $1.5 billion under a definitive agreement announced today.

The luxury retail chain, which was put on the auction block in September by its British owner, BAT Industries PLC, will be bought by Investcorp, a group described as well financed and experienced in retailing.

Separate announcements from Investcorp and BATUS Inc., BAT’s American arm, said the transaction should be completed within 10 weeks. Investcorp will also assume certain of Saks’ liabilities, the two parties said.

Commenting on the selection of Investcorp’s offer, BAT Chairman Patrick Sheehy said it has the resources to support continued expansion of the 45-store chain.

Sheehy said a losing bid submitted by management, in partnership with a Japanese retailer, was attractive but Investcorp’s was superior.

“Saks will gain a new owner with a proven track record in building luxury businesses, solid financial backing and a commitment to continuing the highly successful strategy established by BAT for the company,” Sheehy said.

Investcorp, which operates from bases in various U.S. and foreign financial centers, has invested in a wide range of retailers. Investcorp offices are in New York, London and in cities in Switzerland and Bahrain.

It bought the jewelry chain Tiffany & Co. from Avon Products Inc. and took it public in 1987; it owns 50% of the Italian luxury leather goods and fashion company Gucci and has an interest in Chaumet, France’s largest retailer of prestige jewelry. It also has stakes in Carvel Corp., Color Tile, Sports and Recreation Inc. and some non-retailing companies.

“Saks Fifth Avenue is one of the premier retailers in the world, and we are absolutely delighted to be associated with it,” said Paul Soldatos and Savio Tung, the two members of Investcorp’s management committee that led the effort to buy Saks.

The sale of Saks is part of a restructuring plan aimed at allowing BAT to focus on its core tobacco and financial services operations. The British conglomerate undertook the changes in battling a hostile $22-billion takeover bid by a group led by Anglo-French financier Sir James Goldsmith.

The group said earlier this week that it was quitting its quest for BAT. But BAT said it will carry out its restructuring as planned to enhance the company’s value to shareholders.

All of BATUS’ U.S. retail businesses are being sold. The sale of Marshall Field & Co., the Chicago-based retailer, to Dayton Hudson Corp. was announced last Thursday.

The flagship store of the New York-based Saks chain is in Manhattan on Fifth Avenue. Branch stores are in 20 states.