Somerfield down to two-way shoot-out

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The Independent Online

Two of the property world's biggest names, the Livingstone brothers and Robert Tchenguiz, are to go head-to-head in a battle for Somerfield after rival suitors dropped out of the race.

Two of the property world's biggest names, the Livingstone brothers and Robert Tchenguiz, are to go head-to-head in a battle for Somerfield after rival suitors dropped out of the race.

Richard and Ian Livingstone, with their backer Nomura, and Mr Tchenguiz - who is bidding with Icelandic retailer Baugur, private equity firm Apax Partners and Barclays Capital - are understood to have confirmed detailed bid proposals for Somerfield last week.

But it is understood that property group Topland, controlled by brothers Sol and Eddie Zakay, will not be putting forward an offer. Wal-Mart-owned Asda was also thought to be considering a bid, and was being advised by Lazard. But insiders say the group has not put forward a proposal. Observers expect the chain to concentrate on buying stores once a sale is completed.

Somerfield declined to comment. However, it is thought that both groups have tabled proposals worth around £1.1bn, or some 205p per share.

The interest in Somerfield kicked off in March after the chain rejected an initial £1.03bn approach from the acquisitive Baugur, which has already snapped up Iceland chain Big Food Group this year, and also owns a number of other UK retailers. Somerfield then confirmed that it had received further approaches, while Baugur teamed up with rival suitor Mr Tchenguiz and his backers.

The Livingstone brothers, who are bidding through their London & Regional Properties group, are expected to put up more than £100m of their own cash. They will fund all the equity while Nomura, the Japanese bank, will provide the debt through its asset finance team. Their offer is thought to be slightly lower than the consortium's, but insiders claim it is simpler and that the finances are "in place and ready to go".

Somerfield had issued a deadline of 22 April for indicative offers, but that was extended into last week. It is thought that Apax's decision to walk away from a potential offer for general retailer Woolworths meant the consortium needed more time.

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