If it's worth cuddling up to, then it's worth paying up for. At least that's what gift and toy maker Russ Berrie (NYSE:RUS) told an unnamed suitor yesterday who made an unsolicited bid for the company.

Management said that although it's seeking "strategic alternatives" to maximize shareholder value -- code for shopping the company, or at least parts of it -- it hadn't solicited the offer it received and scoffed at the $18 per-share bid, a mere 1.6% premium to Tuesday's closing price. It said the bid "does not provide sufficient basis for further consideration."

Russ Berrie said it hired Sagent Advisors to help explore its options and that it has received interest from a number of parties for the gift business.

Although it reported a $2.5 million profit last quarter, the gift business has been ailing for some time. Once it comprised more than 75% of Russ Berrie's revenues, but by the end of last year, it was just over 50%, and in the first quarter, it was just 48% of the total. It has been an unprofitable segment for years now, a condition that made it necessary for the company to consider selling it during its reorganization.

In 2005, it was able to offset losses in the gift division by raising cash from its profitable infant and juvenile business. However, it subsequently restructured its debt and realigned itself as a holding company. That limited how the company can use its cash, and it can no longer bail out the gift side.

The gift business has been having a rough go of it lately. Home decor retailer Blyth (NYSE:BTH) has found its U.S. sales bleeding badly and sold off its candle business, while Lancaster Colony (NASDAQ:LANC) has seen its glassware and candle segment dwindling away as well. That seems to make the divisions ripe for consolidation.

Shareholders apparently agreed that the unsolicited offer was too low and bid up the stock to $18.76 by yesterday's close. Yet the company trades at about 26 times EBITDA (earnings before interest, taxes, depreciation, and amortization) which is about two to three times more than Blyth or Lancaster, but also twice as rich as more successful Lenox (NYSE:LNX).

So while Russ Berrie's gift division may be steadily narrowing its losses and the company has most recently turned a profit, $18 a stub might be so far fetched that it was worth pulling the stuffing out of the offer.

Wonder who else sells gifts? Check out these names and what the Fool has to say:

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.