The UK’s Big Food Group has said that it would recommend to shareholders a takeover bid from Iceland’s Baugur if made at the offer price of 110 pence per share.
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Big Food Group said earlier this week that it had received a preliminary approach from Baugur, which already owns 22% of BFG, and certain other investment partners regarding a possible offer for the company.
The board said it had agreed to allow Baugur to conduct due diligence on the company in order to explore further whether a formal offer can be put forward.
“The board confirms at the request of the (Takeover) Panel that if an offer at this price were to be made today, it would, subject to, inter alia, other terms and conditions, recommend it to shareholders,” Big Food Group said.
As well as confirming Baugur’s offer, Big Food Group has said poor weather conditions since July have impacted its performance.
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By GlobalData“The environment has also continued to be challenging in the light of consolidation in the grocery market and increasing price competition, which is expected to continue,” the company said earlier this week.
Big Food Group said like-for-like sales for the ten-week period to 10 September 2004 were down 3.2% from a year earlier. Like-for-like sales at the company’s Iceland frozen food chain in the same period were down 3.8%. However, the company said its new format Iceland stores continued to perform well, with 32 refits completed over the ten weeks, bringing the total to 218.
