On Friday, when Mr Johannesson, 37, was charged with fraud in Iceland, Baugur contacted its partners in the consortium - the private equity firm Apax Partners, the investment bank Barclays Capital and the property entrepreneur Robert Tchenguiz - and offered to pull out of the group.
A spokesman for the consortium said yesterday: "I'm sure [Baugur's] offer will be accepted." He added that Baugur's exit would not affect the syndicate's bid, which he said was "proceeding perfectly". Another source close to the consortium echoed his comments, saying: "It's full speed ahead." A formal announcement from Baugur on its withdrawal is expected today.
Baugur was considered to be one of the strongest players in the bid battle for Somerfield, Britain's fifth-largest supermarket chain. The Icelandic retailer is also one of the most powerful retail investors in the UK, with large stakes in some of the biggest names in the high street.
The race for Somerfield narrowed last week when United Co-operatives, the owner of the Co-op Late Shop convenience stores, pulled out. Its exit left just two bidders in the battle: the Apax-led consortium and the Livingstone brothers, the founders of the property company London and Regional Properties.
Shares in Somerfield closed at 195.5p on Friday, below the consortium's indicative 205p offer price. A formal offer - if one emerges - is expected within weeks, after the syndicate completed its due diligence assessment of Somerfield last month.
The Icelandic authorities have brought 40 charges of suspected fraud against Mr Johannesson, his father Johannes Jonsson, his sister Kristinn Johannesdottir, two accountants of the company, and a former chief executive, Tryggvi Jonsson. They all strenuously deny any wrongdoing, according to a Baugur spokesman. He stressed that the charges are being brought against the individuals and not the company.
The precise nature of the charges is unclear. They will be made public at a court hearing in Iceland on 17 August. It could then take up to two years before the case is concluded.
The charges come after an Icelandic police investigation begun three years ago, sparked by allegations made by a former US-based business partner of Mr Johannesson that both conspired to issue false invoices to get money out of Baugur. However, the allegations did not stand up when the case went to court.
Baugur, which is 70 per cent owned by the Johannesson family, has appointed lawyers to claim damages against the Icelandic authorities for causing harm to its business and reputation during the three-year investigation.
The London-based Mr Johannesson owns properties in Knightsbridge and Iceland, and a yacht called Viking.Reuse content