Somerfield confirms possible offer
New takeover move in UK supermarket sector
April 15 2003
Supermarket chain Somerfield has confirmed that its has received an approach which could lead to an offer for the business.
In a statement responding to press comment on heavy trading in Somerfield shares, the company said it has received a proposal relating to a possible offer at the end of last week.
Somerfield did not reveal the identity of the potential bidder, with speculation that any of the major supermarket operators could be involved. The company operates the more than 1200 stores through the Somerfield and Kwik Save chains and has a total share of the UK grocery market of around 5.5 per cent.
Icelandic retailer Baugur, a serial investor in underperforming UK retailers and a regular suspect in bid speculation, bought a stake in Somerfield at the end of last year. However, news agency Reuters said ‘industry sources’ had indicated Baugur was not behind the current approach.
Somerfield revealed yesterday that two investment companies, FMR Corp and Fidelity International Limited, have built up a 9.29 per cent stake in the business through various subsidiaries.
Somerfield said the current proposal is subject to various conditions, with no certainty that an offer will be made.
