Major UK retailer Asda has teamed up with frozen food supermarket chain Farmfoods to make a GBP1.4bn (US$1.4bn) bid for frozen food retailer Iceland Foods, according to reports.
Yesterday (6 November) The Sunday Telegraph reported that Asda is making a bid for Iceland Foods, which is currently owned by failed Icelandic banks Landsbanki and Glitnir. The pair have combined their respective 67% and 10% stakes in the frozen food retailer and are in the process of auctioning it.
The report added that Asda and rival Morrison’s have both made bids of around GBP1.3bn to GBP1.5bn, but would each have to sell 200 of the 800 stores to avoid competition problems. Asda would sell the 200 to Farmfoods, the newspaper said.
A spokesman for Morrisons said: “We’re not commenting on it at all. We have a policy of not commenting on any potential transaction whether we’re interested or not.”
Farmfoods also refused to comment. Asda was not immediately available for a statement at time of writing.
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Malcolm Walker, the founder and current CEO of Iceland Foods, owns 23% of the company, along with other managers, and has repeatedly expressed an interest in buying the remaining stock, with reported backing from a private equity firm. It is believed he is waiting for other interested parties to bid as he only only has to match the highest bid from a rival in order to secure the shares, thanks to a clause within a shareholder agreement.