Morrisons has confirmed that it has appointed Credit Suisse to advise it a potential bid for frozen food retailer Iceland Foods.
A spokesperson for Morrisons told just-food today (12 August) that Credit Suisse has been appointed but would not comment any further on the retailer’s plans.
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Iceland Foods’ majority owner, Landsbanki, has put its 67% stake in the chain up for sale. Morrisons, if it does bid for the retailer, is likely to face competition from Iceland CEO and founder Malcolm Walker, who has made it clear that he is focused on keeping the company independent.
Industry watchers have suggested the chain would be valued at between GBP1.4bn (US$2.26bn) and GBP1.6bn. It has also been suggested that Asda might be looking at a bid for the chain.
In May, Shore Captial analyst Clive Black said that the rationale behind a bid by Morrisons for Iceland is “clear to our minds”.
“Morrisons lacks the format diversity of Sainsbury and Tesco with no presence in the convenience or hypermarket segments. In a market where, despite much counter perception, planning permission for large stores is difficult to obtain, without format diversity space growth is near impossible to achieve at any material sustainable extent,” Black said
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By GlobalDataIn July, CFO Richard Pennycook suggested the retailer might be interested in snapping up individual stores rather than a bid for the entire chain. He said Morrisons had benefited from buying stores that Asda and The Co-operative Group needed to sell after their respective acquisitions of Netto’s UK arm and Somerfield.
