PENTOS, owner of Dillons bookshops and Rymans stationers, gave up its

battle for survival yesterday and called in the receiver.

The move came as its bankers refused to extend any further credit to

the group which has struggled to drag itself out of the financial mire

during the past two years.

The collapse of the business places almost 3000 jobs at risk. Dillons'

main book store in London's Gower Street, close to London University,

was shut first thing yesterday morning with large notices posted on its

doors and windows.

However, there is a very good chance that at least the Dillons

business will be sold by the receiver, KPMG. ''Dillons is an extremely

well-known High Street name with an outstanding reputation throughout

the UK,'' said KPMG insolvency partner Stephen James. Dillons has 12% of

the market for new titles, including its Hatchards chain bought in 1990.

Former chairman and founder of the group, Terry Maher has been

mentioned as a possible buyer along with Barnes & Noble, the American

discount chain, Richard Branson's Virgin Group and John Menzies.

W H Smith appears to be ruled out as a possible buyer because it

already sells books through W H Smith books and its specialist chain

Waterstones.

Mr Maher said he was ''deeply angry'' that the group had collapsed.

The Booksellers' Association said it was ''shocked and dismayed'' at the

news.

Trading within Pentos was said to be recovering but at the end of the

day the estimated extra #20m of working capital the group needed was not

forthcoming from its banks, led by Barclays and Midland.

''Despite strenuous efforts by the board, discussions regarding a

refinancing of the company with both the company's banks and other

interested parties have not proved successful,'' the company said.

This was perhaps not surprising given its already high level of

indebtedness with #50m borrowings at the year-end, a figure set to rise

to as much as #75m by the end of this month as the group pays suppliers

and its next quarterly rent bill. During the past few weeks Pentos has

been trying to secure lower rents from its landlords and easier payment

terms from its creditors.

In January it put its Athena poster and greetings cards High Street

chain into administration in an attempt to try to focus on saving the

Dillons chain. Around 600 jobs were lost in Athena. Buyers had been

sought for Rymans stationery and the Pentos Office Furniture businesess.

The latter is not currently in receivership.

Pentos management is headed by Sir Kit McMahon, former deputy governor

of the Bank of England, and Bill McGrath, a former director of the

Wickes DIY chain. Its shares were suspended at 4.5p on Monday.

Behind a bitter denouementpage12