Walker and the Iceland Foods management is in discussions to buy a combined 77% stake in the business

Walker and the Iceland Foods management is in discussions to buy a combined 77% stake in the business

Iceland Foods founder and CEO Malcolm Walker is in exclusive talks to buy the UK frozen food retailer.

Walker and the Iceland Foods management is in discussions to buy a combined 77% stake in the business put up for sale by failed Icelandic banks Landsbanki and Glitnir.

It is understood that Walker and Iceland's management, which own the rest of the retailer, have tabled a bid worth GBP1.55bn (US$2.43bn).

News that Walker is in exclusive talks with the banks means he looks poised to beat off competition from private-equity firms Bain Capital and BC Partners and buy the chain. Iceland, which Walker founded in 1970, has around 850 outlets in the UK.

"I am delighted that the Icelandic banks have recognised the importance of management to the continuing success of the business and have been supportive in giving us the exclusive right to pursue negotiations with them," Walker said. "I have every hope that we will be able to bring these to a successful conclusion within the coming weeks."

Walker has pre-emption rights that means can buy Iceland if, within 42 days of a final offer becoming unconditional, he matches a rival bid. BC Partners and Bain Capital's offers are understood to have been made at the start of the month.

The Daily Telegraph reported that Walker was forced to move quicker by the threat that other members of Iceland's management coudl join forces with one of the private-equity firms.

However, a spokesperson for Iceland said the report was "completely wrong". He added: "There was never any question of management defections."

Landsbanki said a binding agreement is expected to be signed "in a short period if time". It added: "Landsbanki believes that this approach delivers the most certainty around sale completion whilst achieving the objective of maximising the proceeds from the sale of the shares."