Somerfield suitor quits takeover race

Bristol-based Somerfield said it remained in talks with the other potential bidders who are still interested in paying the estimated £1.2bn (€1.8bn) required to land the UK’s fifth largest supermarket group.

They are thought to include a consortium consisting of Icelandic retail group Baugur and property tycoon Robert Tchenguiz as well as a combination of London & Regional Properties and Japanese bank Nomura.

United Co-operatives, which is the country’s biggest regional co-operative group, was a surprise runner in the takeover battle.

It said in May that it had the necessary financial firepower as it looked to build on its strategy of expanding in the convenience store sector.

The Rochdale-based group generates annual sales of £1.89bn (€2.8bn) and trading profits of £50m (€75.2m) from its portfolio of grocery stores, car dealerships, travel agencies and pharmacies. It employs 15,500 staff in the north of England.

In a statement today United Co-operatives said it had decided not to proceed with an offer for Somerfield.

A spokesman added: “We said at the outset that this was not a must-do deal for us. We have had a look but have decided that it does not stack up for us.”

A successful move for Somerfield would have given it a significant presence in many regions outside its northern heartland. Somerfield’s portfolio includes 664 Somerfield stores and 560 Kwik Save sites across the UK.

The takeover saga involving Somerfield stretches back several months and included the rejection of a £1bn (€1.5bn) offer from acquisitive Iceland-based retail group Baugur in February.

Baugur recently completed the takeover of Big Food Group and is thought to be keen to bring the Iceland retail chain into the larger Somerfield operation.