The UK's Big Food Group has announced that Icelandic investment firm Baugur has proposed a revised takeover offer price of 95p (US$1.83) per share in cash.

BFG, which operates frozen food retailer Iceland, said the revised proposal is subject to Baugur and its investment partners receiving final credit committee approvals from their financing banks, but warned that there is no certainty that the proposal will lead to a formal offer. The company said any offer is expected to be announced no later than 17 December 2004.

"The board confirms that it would, subject, inter alia, to agreement on other terms and conditions, recommend an offer of 95 pence per share to shareholders," Big Food Group said in a statement.

Big Food Group said in September that it had received a preliminary approach from Baugur and its investment partners regarding a possible offer for the company of 110p per share. However, since then, while Baugur was conducting due diligence, there have been concerns about BFG's poor trading and its pension deficit.