According to sources, Permira, which opened up shop 20 years agoin London and has seven offices in Europe and one in New York, wasinitially interested only in Toys' stronger European operations,but company officials have said repeatedly that they don't intendto sell the business off piece by piece. The New York-based Apollohas apparently been brought to the table to add muscle to a bid forthe whole 1,200-store operation. That bid, if successful, couldlead to an eventual separation of the domestic and internationaloperations anyway, according to sources.

A spokesperson for Toys 'R' Us declined to comment on thepotential sale of the operation. Permira and Apollo could not bereached for comment.

As part of its ongoing effort to right its financial ship, Toys'R' Us, based here, has already sold off its Kids 'R' Us operation.If and when the retail toy business is disposed of, the companywould be left with just its more successful Babies 'R' Us division,which company officials have indicated is not for sale.