Somerfield bidders given October deadline
Potential takeover parties circling British supermarket chain Somerfield were today ordered to bid within a month or walk away.
The UK's Takeover Panel has set a deadline of October 14 for the groups vying for Somerfield to “put up or shut up”, removing uncertainty that has dogged the supermarket chain since the middle of February.
The statement from the Panel confirmed that it was a two-horse race for control of Somerfield, with property firm London & Regional competing with a consortium featuring property tycoon Robert Tchenguiz, private equity group Apax Partners and Barclays Capital.
Both sides have held extensive talks with Somerfield about an offer, but have so far failed to table a formal offer.
The supermarket went public with its exasperation at this by telling investors last week that it wanted “a prompt conclusion” to the bid process.
Somerfield, which has around 1,300 stores in the UK, is valued in the City at around £1.13bn (€1.66bn) and the drawn-out talks have raised fears among shareholders that the bid rivals will make a cut-price offer and try to land the group on the cheap.
Some investors have said they would rather the Somerfield board walks away than accept a bid that was too low.
The takeover talks have taken place against a background of aggressive price-cutting by supermarkets which are battling to overcome a reluctance of shoppers to splash out.
Last week, the group reported like-for-like sales growth of 0.3% for its Somerfield stores during the 16 weeks to August 20, but sales overall were 1.8% lower due to weakness at its Kwik Save brand.
Sales at its Somerfield stores were 0.7% lower in the first nine weeks of the period, but this had since been reversed with growth of 1.6% over the following month and a half.
