Somerfield agrees to takeover talks
A takeover of British supermarket chain Somerfield moved closer today after the chain agreed to hold talks with potential bidders.
Somerfield said the move would establish whether “proposals could be developed on a basis which could result in a formal offer at a price which could be recommended by the board”.
The announcement comes after the Bristol-based group revealed last week that it had received fresh takeover approaches.
Somerfield has already rejected a potential offer worth £1bn (€1.5bn) from the Iceland-based retail investment group Baugur, which is thought to be keen on linking the chain with its newly acquired Big Food Group.
It remained tight-lipped on the parties involved and whether Baugur had returned with a higher offer, but analysts believe a takeover battle could value the chain at up to £1.2bn (€1.7bn).
Other names mentioned in the City include property tycoon Robert Tchenguiz who has reportedly teamed up with Apax Partners and Barclays Private Equity to make an offer.
Somerfield is no stranger to takeovers after knocking back interest worth £594m (€864.7m) from retail entrepreneurs John Lovering and Bob Mackenzie in 2003.
The group, which has 700 Somerfield stores and more than 500 Kwik Save sites, recently admitted a decline in like-for-like sales as it joined other retailers in warning of challenging trading conditions.
Baugur has also acquired Hamleys and Goldsmiths in recent months in an acquisition spree that has given it an annual turnover of £6.8bn (€9.9bn).
