Toys R Us Inc., the nation’s second largest toy seller, agreed yesterday to be acquired by an investment group that includes two private equity firms and a real estate developer in a deal valued at $6.6 billion, ending a seven-month auction for the struggling retailer.

Toys R Us shares jumped just under 5%, or $2.23, to close at $26 on the New York Stock Exchange.

The Wayne, N.J.-based company had announced in August it would seek to separate its sluggish toy business from the smaller, but more lucrative, Babies R Us division.

Instead, the company agreed to be swallowed whole by Kohlberg Kravis Roberts & Company, Bain Capital LLC, and Vornado Realty Trust, who will be equal partners.

“We look forward to building on the many strengths of the company to make the stores a better place to shop and work,” said a director at KKR, Michael M. Calbert.

KKR is the storied buyout firm that won the celebrated takeover battle for RJR Nabisco in the late 1980s.

A managing director at Bain Capital, Matt Levin, said, “Toys R Us and Babies R Us are premiere franchises with strong global brand recognition and a collection of high-quality product offerings.”

The consortium will acquire all shares of Toys R Us for $26.75 a share, an 8% premium over Wednesday’s close. The roughly 215 million Toys R Us shares outstanding account for $5.75 billion of the deal, with the remainder coming from outstanding options, nonvested restricted stock, warrants and convertible bonds, said Toys R Us chairman and CEO John H. Eyler Jr.

He said it was up to the new owners to determine what stores, if any, would be closed, but added, “The new owners paid a significantly handsome price, and the only way you can pay that price is if you believe in the future of the business, so I expect this business to be around for a very long time.”

The buyers are also assuming an undisclosed amount of debt.

Toys R Us had been a public company since 1978. Completionof the deal requires regulatory review and approval by the shareholders, and is expected to occur by July, the company said.

Toys R Us, second to Wal-Mart Stores in toy sales, announced in August it would separate its toy business from the Babies R Us segment.

The toy business has been losing market share for years to Wal-Mart and other discounters such as Target.

Although Toys R Us has 681 toy stores in America, and 601 overseas, the 218 Babies R Us stores have been an increasing factor in profitability.

Babies R Us, which sells baby furniture, clothes and accessories, account ed for three-quarters of the company’s operating income, despite logging just 15% of the company’s $11.6 billion in sales for the fiscal year that ended January 31, 2004.

In that fiscal year, sales at Babies R Us stores open at least a year rose 2.8%, while sales at domestic Toys R Us stores open at least a year fell 3.6%.

Results for fiscal 2005 were to be released yesterday, but the company on Tuesday said the figures would be indefinitely delayed to allow the company to compute changes in how it accounts for leases. The delay was not related to the planned restructuring, the company said.

The purchase of Toys R Us appeared to be inevitable given the gloomy prospects for the toy industry. The toy business has been battered by discounters, making the industry commodity-driven.

Children are also growing out of toys faster, embracing high-tech gadgets like cell phones and iPod players, found at consumer electronics stores.

Many toy makers are fighting back by offering items other than toys, from children’s furniture to child-friendly electronic gadgets. Still, analysts expect it will be another tough year for toy makers. Overall traditional toy sales fell 3% to $20.1 billion in 2004, from $20.7 billion in 2003, following a 2.9% drop in 2003.