Morrisons edges closer to bid for Iceland
Morrisons is reported to be holding preliminary talks with banks about a potential Â£1.5 billion bid for Iceland Foods, according to the Daily Telegraph.
Sainsbury’s and Asda are also reported to be interested in making a bid although Morrisons is regarded as a front-runner at present.
Iceland is being sold by the Resolution Committee of failed Icelandic bank Landsbanki which holds a 67% stake in the frozen food chain. The committee is thought to be seeking a price tag of £1.8 billion to £2 billion for the sale.
Morrisons would triple the number of stores in its portfolio if it were to buy Iceland which currently has 750 stores. It would also enable the supermarket to increase its market share from 12% to 14%, grow its presence in London and the South East, and strengthen its convenience store offering.
However, if it does submit a bid it is likely to meet opposition from Malcolm Walker, Iceland’s founder and CEO, who has a 26% stake in the business. Walker has already indicated that he would like to submit a bid and could team up with a number of private equity firms which have also expressed an interest in the sale.
Iceland achieved sales of £2.2 billion last year and profits of £184.2 million.
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