Walker aims to keep Iceland independent

Walker aims to keep Iceland independent

Iceland Foods chief executive and minority owner Malcolm Walker has insisted that the management of the frozen-food retailer, in which a majority stake is up for sale, remains focused on keeping the company "independent".

At the end of last month, failed Icelandic bank Landsbanki said it will formally kick off the sale of its majority 67% stake in the UK retailer. Speculation has since linked the likes of Asda and Morrisons to a potential bid, said to be valued at between GBP1.4bn (US$2.26bn) and GBP1.6bn.

Iceland today (10 June) booked a 14.8% increase in pre-tax profits, which rose to GBP155.5m for the year to 25 March.

Commenting on the result, Walker said that the company's existing management - which collectively holds a 23% stake in the group - would look to remain independent as it drives continued growth. The company revealed that it plans to open 15 further stores over the coming year, having opened 21 new locations during the previous fiscal year.

A spokesperson for Walker said that management was opposed to a "break-up" of the company and reiterated their interest in taking full control of the group.

"A shareholder rights plan provides management with the option to match any offer, so they are in a strong position," the spokesperson said. However, the spokesperson added that it is "early days" in the sale process.

Likewise, RBS analyst Justin Scarborough also suggested that Walker and the Iceland management team are in a "strong position" to become the "ultimate owners" as they "know the business inside out".

Scarborough added that UK retailers should consider a number of factors before tabling bids for Iceland. He emphasised that although Iceland's sales densities are below some of the county's other retail majors, it does already achieve "high margins". Other factors include the "secondary and tertiary locations of many of its stores" and competition issues that would require "messy" store disposals, Scarborough said.