UK grocery retailer Somerfield has confirmed that it has received an approach from Icelandic retail group Baugur regarding a possible takeover offer that values Somerfield at around £1bn (US$1.86bn).
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Somerfield, which operates the Somerfield and Kwik Save chains, said the possible cash offer was of 190 pence per share. The company said the approach envisages the current management continuing to run the business and is subject to a number of pre-conditions, including the undertaking of due diligence and the recommendation of the Somerfield board.
“The board is investigating this approach. There can be no certainty that an offer will be forthcoming,” Somerfield said, adding that the board would make a further announcement in due course.
A takeover of Somerfield would enable Baugur to merge the Somerfield and Kwik Save chains with frozen food retailer Iceland. Baugur is close to completing the acquisition of Iceland’s owner, the UK’s Big Food Group.
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