Somerfield suitors given October bid deadline

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The Independent Online

The two rival bidders for Somerfield were given a four-week deadline yesterday to make an offer for the supermarket group or walk away.

The Takeover Panel said the ABT consortium - made up of Apax Partners, Barclays Capital and the Tchenguiz family trust - and London and Regional Properties, owned by the developers Richard and Ian Livingstone, had until close of play on 14 October to "put up or shut up".

Somerfield, which also owns the Kwik Save brand, has been under siege since March when the Icelandic retailer Baugur made a £1.04bn bid approach backed by the property investor Robert Tchenguiz, who said he might also be interested in buying the UK's fifth-biggest supermarket chain.

Baugur, which already owns Iceland and a string of UK fashion chains including Karen Millen, Oasis and Whistles as well as the toy shop Hamleys, subsequently withdrew from the ABT consortium after its chief executive Jon Asgeir Johannesson became entangled in fraud charges in his native Iceland.

Although the takeover speculation has helped lift Somerfield shares by more than half in the past year, enabling them to outperform the FTSE All-Share Index four times, the long-running bid interest has also been a distraction for management as it struggles to halt falling sales.

Somerfield's board said last week that it wanted a "prompt conclusion" to the bid saga after reporting a 1.8 per cent dip in quarterly like-for-like sales. The Takeover Panel said that all parties had agreed to the statement issued yesterday.

Both bidders are understood to have completed their due diligence and agreement has been reached on what to do with the deficit in the Somerfield pension scheme but no firm offers for the company have been made.

Shares in Somerfield closed a fraction of a penny lower at 201.5p last night, valuing the company at £1.1bn.

The two bidders have been attracted by Somerfield's strong cash flows and property assets, which have a net book value of £543m as of April last year. The Tchenguiz brothers failed in an attempt to buy Selfridges two years ago.

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