Somerfield talking to suitors
Supermarket group opens talks with potential bidders
Somerfield has agreed to enter talks with the potential bidders which have approached the supermarket operator, effectively triggering an auction for the business.
After a day of talks, the Somerfield board issued a statement on Thursday evening saying it had considered the proposals which it has received regarding possible cash offers for the company. It said: “The Board has decided to enter into discussions with the potential offers with a view to establishing whether the proposals could be developed on a basis which would result in a formal offer at a price which could be recommended by the board of Somerfield.”
The move means that Icelandic retail group Baugur, property company London and Regional, headed by brothers Ian and Richard Livingstone, a consortium of property tycoon Robert Tchenguiz, buyout house Apax and Barclays Capital, will all be granted access to Somerfield’s.
Having already rejected an approach pitched at around 190p a share from Baugur, the Tchenguiz consortium, which has indicated an offer in the region of 210p, still seems favourite.
However, both Baugur and London and Regional are likely to table increased offers if the due dilgence process, which will take several weeks, justifies the value Somerfield apparently places on the business. Buagur is understood to have said it will now consider an offer of around 205p. London & Regional, advised by Japanese bank Nomura, had also originally indicated a bid of 190p, and will now be reviewing this.
Somerfield operates more than 1,300 stores nationwide, including 520 Kwik Save outlets and the 114 former Safeway Compact stores acquired from Morrisons, rebranded as Somerfield.
